(Labor) Quick Digests

EMPLOYER RECOGNITION
Pangilinan et al vs General Milling Corp. (GMC)
GMC is engaged in the production and sale of livestock and poultry. It is, likewise, the distributor of dressed chicken to
various restaurants and establishments nationwide. As such, it employs hundreds of employees, some on a regular
basis and others on a casual basis, as emergency workers.
Pangilinan et al were employed by GMC on different dates as emergency workers at its poultry plant under separate
temporary/casual COEs for a period of 5 months. They worked as chicken dressers, packers or helpers. Upon the
expiration of their COEs, their services were terminated.
They later filed separate complaints for ID and non-payment of holiday pay, 13th month pay, night-shift differential (NSD)
and SIL pay against GMC before the NLRC.
They alleged that their work was necessary and desirable in the usual business of GMC, and added that although they
worked from 10 PM to 6 AM they were not paid NSD. They stressed that based on the nature of their work, they were
regular employees and could not be dismissed without just cause and after due notice. They cited Jayme, et al. vs. GMC
and Carino, et al. vs. GMC. They asserted that GMC terminated their COE without just cause and due notice. They further
argued that GMC could not rely on the nomenclature of their employment as temporary or casual.
LA ruled for Pangilinan et al declaring that they were regular employees. LA found that they were illegally dismissed and
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ordered GMC to reinstate them with backwages as well as 13 mo., HP, SIL pay, attys fees.
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NLRC reversed but affirmed the money awards except 13 mo. It held that Pangilinan et al, who were temporary or
contractual employees, were legally terminated upon the expiration of their respective contracts. Citing the case of Brent
School, Inc. vs. Zamora, it explained that while their work was necessary and desirable in the usual business of GMC,
they cannot be considered as regular employees since they agreed to a fixed term. CA affirmed.
Issue: W/N Pangilinan et al were regular employees of GMC when their employment was terminated?
Ruling: NO
They were employees with a fixed period, and, as such, were not regular employees.
Article 280 LC comprehends 3 kinds of employees:

(a) regular employees or those whose work is necessary or desirable to the usual business of the employer;
(b) project employees or those whose employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the duration of the
season; and,
(c) casual employees or those who are neither regular nor project employees.

There are two separate instances whereby it can be determined that an employment is regular: (1) if the particular activity
performed by the employee is necessary or desirable in the usual business or trade of the employer; and, (2) if the
employee has been performing the job for at least a year.
In the case of St. Theresas vs. NLRC we held that Article 280 does not prohibit an employment contract with a fixed
period. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or
desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the
performance of such activities. Indeed, in the leading case of Brent School Inc. v. Zamora, we laid down the guideline
before a contract of employment may be held as valid, to wit:
Stipulations in employment contracts providing for term employment or fixed period employment are valid when
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the period were agreed upon knowingly and voluntarily by the parties without 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.
An examination of the contracts entered into by Pangilinan et al showed that their employment was limited to a fixed
period, usually 5 or 6 months, and did not go beyond such period. The stipulations in the COEs were knowingly and
voluntarily agreed to by them without force, duress or improper pressure, or any circumstances that vitiated their
consent. Similarly, nothing therein shows that these contracts were used as a subterfuge by GMC to evade the provisions
of Articles 279 and 280 LC.
While their employment is necessary and desirable in the usual business of GMC, they were employed on a mere
temporary basis, since their employment was limited to a fixed period. As such, they cannot be said to be regular
employees, but are merely contractual employees. Consequently, there was no ID when their services were terminated
by reason of the expiration of their contracts. A contract for employment for a definite period terminates by its own term at
the end of such period.
EMPLOYER DETERMINATION/DESIGNATION
Violeta and Baltazar vs NLRC, Dasmarinas Industrial and Steelworks Corporations (DISC)
Violeta and Baltazar were former employees of DISC. Violeta worked in Construction and Development Corporation of
the Philippines (CDCP), a sister corporation of DISC, at its project in CDCP Mines in Basay, Negros Oriental from Dec15,
1980-Feb 15, 1981. DISC then hired him as Erector II at its project for Philphos in Isabel, Leyte in 1982 until the
termination of the project in 1984.
In 1985, he was reassigned as Erector II for Five Stand TCM Project, with vacation and sick leaves, and was designated
as a regular project employee at DISC’s project for National Steel Corporation (NSC) in Iligan City. After receiving a
salary adjustment, he was again hired in 1989 as Handyman for the civil works of a construction project for NSC. In 1992,
he was appointed for project employment, again as Handyman, to NSC ETL #3 Civil Works by DISC. Due to the
completion of the particular item of work he was assigned to, DISC terminated the services of Violeta on March 15, 1992.
Baltazar started in the employ of CDCP in 1980. He was hired as Lead Carpenter for project Agua VII in 1981. Like
Violeta, he was transferred from one project to another as a regular project employee. In 1991, he was hired as
Leadman II in ETL #3 Civil Works by DISC in its project for NSC, but he was separated from such employment in 1991 as
a result of the completion of said item of work.
Upon their separation, they executed a quitclaim in favor of DISC. Contending that they are already regular employees,
they filed 2 separate complaints for ID against DISC, with a prayer for reinstatement and back wages plus damages.
DISC admitted that Violeta was hired in 1989 to 1992 as Handyman while Baltazar was employed in 1989 to 1991 as
Leadman II. It argued that both are project employees based on their declaration in their Appointments for Project
Employment that they are employed only for the period and specific works stated in their respective appointments, in
addition to their admission that they are project employees who are subject to the provisions of Policy Instruction No. 20.
LA dismissed the claims but ordered DISC to grant them separation pay based on the findings that it is the policy of
DISC to pay employees who have rendered at least 1 year of continuous service. It concluded they are project employees
based on their admission that they are regular project employees whose employment was coterminous with the project for
which they were engaged.
Initially, NLRC found them to be non-project employees and declared their dismissal as illegal. It held that although their
appointment contracts specified fixed terms or periods of employment, the fact that they were hired and transferred from
one project to another made them non-project employees who cannot be terminated by reason alone of the completion of
the project.
However, NLRC reversed itself and held that the employment of V and B in ETL #3 Civil Works was allegedly for a
specific or fixed period thus making them project employees. It held that since the termination of their employment was
due to the completion of the project, they are therefore not entitled to separation pay. It ruled that this would hold true
even if they were categorized as regular project employees because their employment was not permanent but

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coterminous with the projects to which they were assigned.
Issue: W/N V and B are project employees?
Ruling:
We have held that the services of project employees are coterminous with the project and may be terminated upon
completion of that project for which they were hired. Regular employees, in contrast, are legally entitled to remain in the
service of their employer until their services are terminated by one or another of the recognized modes of termination of
service under the Labor Code. The source of the definition of a regular employee vis--vis a project employee is found in
Article 280:
Art. 280. The provisions of written agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee or where the work or service to
be performed is seasonal in nature and the employment is for the duration of the season.
An employee shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall
be considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such activity exists.
Article 280 was emplaced in our statute books to prevent the circumvention of the employees right to be secure in his
tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of
regular employment defined therein.
As Handyman and Erector II, respectively, their services are both necessary and vital to the operation of the business
of DISC. This is confirmed by the fact that they were continually and successively assigned to the different projects
of DISC and its sister company, CDCP.
W/N their employment falls under the exceptions provided in Article 280? NO.
The principal test for determining whether particular employees are properly characterized as project employees is
whether or not the project employees were 1) assigned to carry out a specific project or undertaking, 2) the duration
and scope of which were specified at the time the employees were engaged for that project.
In this case, we find them to be regular employees and not project employees. Their dismissal, therefore, could not be
justified by the completion of their items of work.
There is no debate that they were hired for a specific project or undertaking. The fact of the completion of said item of
work is also undisputed. However, the records are barren of any definite period or duration for the expiration of their
assigned items of work at the time of their engagement. In fact, the lines for DATE OF COVERAGE in the appointments
are left blank.
While the word co-terminus was adopted in their appointments, it cannot readily be concluded that their employment is for
a definite duration, that is, until the completion of their items of work, because there are other words used in the aforesaid
appointments affecting their entitlement to stay in their job. To be concrete, the pertinent terms of the Appointments For
Project Employment of petitioners are quoted below, thus:
Your herein Appointments will be co-terminus with the need of _____________as it will necessitate personnel in
such number and duration contingent upon the progress accomplishment from time to time. The company shall
determine the personnel and the number as work progresses.
We hold that their respective employments is not subject to a term but rather to a condition, that is, progress
accomplishment. It cannot be said that their employment had been pre-determined because, firstly, the duration of their
work is contingent upon the progress accomplishment and, secondly, the contract gives DISC the liberty to determine the

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personnel and the number as the work progresses. It is ineluctably not definite to exempt DISC from Art. 280.
In fact, their appointments were not coterminous with NSC ETL #3 Civil Works but with the need for such particular items
of work as were assigned to them, as distinguished from the completion of the project. With such ambiguous and obscure
words and conditions, their employment was not co-existent with the duration of their particular work assignments
because their employer could, at any stage of such work, determine whether their services were needed or not. Doubts
should be resolved in favor of labor.
There is another reason why we should rule in favor of V and B. Nowhere in the records is there any showing that
DISC reported the completion of its projects and the dismissal of V and B in its finished projects to the nearest Public
Employment Office in compliance with Policy Instruction No. 20.
The failure of an employer to report to the nearest PEO the termination of its workers services every time a project or a
phase thereof is completed indicates that said workers are not project employees. In the case at bar, only the last and
final termination of V and B was reported to the PEO, when it should have reported every time a project ended.
Just as important, the fact that they had rendered more than 1 year of service at the time of their dismissal overturns
DISC’s allegations that they were hired for a specific or a fixed undertaking for a limited period of time. Even if we
disregard their stints with CDCP, it cannot be disclaimed that they have rendered long years of service in DISCS business
affairs (they both served for 10 years).
Gaps in employment in between projects?
In the first place, Article 280 contemplates both continuous and broken services. In the second place, there is
absolutely no evidence of V and B having applied for outside employment during the brief interregna in the continuity
of their work. Their undertaking in the Employment Terms and Conditions of their service to DISC bound them to work in
such place of work or project as DISC may assign or transfer them, with the further agreement that they would so work
during rest day, holidays, night time and night shift or during emergencies.
The fact that they signed quitclaims will not bar them from pursuing their claims as these are frowned upon as contrary to
public policy, and are ineffective to bar claims for the full measure of the workers legal rights.
San Miguel Corp vs NLRC, De Guzman
De Guzman was hired by SMC as helper/bricklayer for a specific project, the repair and upgrading of furnace C at
its Manila Glass Plant. His COE provided that said temporary employment was for a specific period of approximately 4
months.
He was able to complete the repair and upgrading of furnace C. Thus, his services were terminated. His employment
contract also ended that day. A little more than a week later, he was again hired for a specific job, which involved the
draining/cooling down of furnace F and the emergency repair of furnace E. This project was for a specific period of
approximately 3 months. After the completion of this task, his services were terminated.
De Guzman then saw his name in a Memorandum posted at the Bulletin Board as among those who were considered
dismissed. After the lapse of more than 3 years from the completion of the last undertaking for which he was hired, he
filed a complaint for illegal dismissal against SMC.
LA dismissed the complaint and sustained SMC’s argument that De Guzman was a project employee. The position of a
helper does not fall within the classification of regular employees. Hence, he never attained regular employment status.
Moreover, his silence for more than 3 years without any reasonable explanation tended to weaken his claim.
NLRC reversed and held that he was illegally dismissed. It found SMC’s scheme of subsequently re-hiring him after only
10 days from the last day of the expiration of his COE for a specific period, and giving him again another COE for another
specific period cannot be countenanced. This violates his constitutional right to security of tenure under which even
employees under probationary status are amply protected.
Issue: W/N De Guzman was a project employee? YES.

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Ruling:
Art. 280 LC defines regular, project and casual employment. Under Article 280 an employment is deemed regular when
the activities performed by the employee are usually necessary or desirable in the usual business or trade of the
employer even if the parties enter into an agreement stating otherwise. But considered not regular under said Article are
(1) the so-called project employment the termination of which is more or less determinable at the time of employment,
such as those connected with a particular construction project; and (2) seasonal employment, which by its nature is only
for one season of the year and the employment is limited for the duration of that season, such as the Christmas holiday
season. Nevertheless, an exception to this exception is made: any employee who has rendered at least 1 year of
service, whether continuous or intermittent, with respect to the activity he performed and while such activity actually
exists, must be deemed regular.
Whether one is employed as a project employee or not would depend on whether he was hired to carry out a specific
project or undertaking, the duration and scope of which were specified at the time his services were engaged for
that particular project. Another factor that may be considered is the reasonable connection between the particular
activity undertaken by the employee in relation to the usual trade or business of the employer; if without specifying the
duration and scope, the work to be undertaken is usually necessary or desirable in the usual business or trade of the
employer, then it is regular employment and not just project much less casual employment.
Thus, the nature of one’s employment does not depend on the will or word of the employer. Nor on the procedure of
hiring and the manner of designating the employee, but on the nature of the activities to be performed by the employee,
considering the employers nature of business and the duration and scope of the work to be done.
In ALU-TUCP vs. NLRC, this Court discussed two types of projects:
Project could refer to one or the other of at least 2 distinguishable types of activities. Firstly, a project could refer
to a particular job or undertaking that is within the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times.
The term project could also refer to, secondly, a particular job or undertaking that is not within the regular
business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the
ordinary or regular business operations of the employer. The job or undertaking also begins and ends at
determined or determinable times.
De Guzman’s employment clearly falls within the definition of project employees under par 1 of Article 280 and such is a
typical example of the second kind of project employment in the ALU-TUCP.
Note that the plant where he was employed for only 7 months is engaged in the manufacture of glass, an integral
component of the packaging and manufacturing business of SMC. The process of manufacturing glass requires a furnace,
which has a limited operating life. SMC resorted to hiring project or fixed term employees in having said furnaces repaired
since said activity is not regularly performed. Said furnaces are to be repaired or overhauled only in case of need and
after being used continuously for a varying period of 5-10 years.
In 1990, 1 of the furnaces required repair and upgrading. This was an undertaking distinct and separate from SMC’s
business of manufacturing glass. He was thus hired by SMC on a temporary status for a specific job for a determined
period of approximately four months.
Upon completion of the undertaking, his services were terminated. A few days, thereafter, 2 of SMC’s furnaces required
draining/cooling down and emergency repair. He was again hired to help in the new undertaking, which would take
approximately 3 months to accomplish. Upon completion of the second undertaking, his services were likewise
terminated. He was not hired a third time, and his two engagements taken together did not total one full year in order to
qualify him as an exception under Art. 280.
Being a project employee, his termination was not tantamount to ID.
REGULAR EMPLOYEE DEINITION

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Pangilinan vs GMC, supra
NATURE OF WORK
Hacienda Fatima, Villegas et al vs National Federation of Sugarcane Workers-Food and General Trade
Hacienda Fatima did not look with favor workers having organized themselves into a union. Thus, when Union was
certified as the collective bargaining representative, Hacienda, under the pretext that the result was on appeal, refused to
sit down with the union for the purpose of entering into a CBA. Moreover, the workers were not given work for more
than one month. In protest, they staged a strike which was however settled upon the signing of a MOA which stipulated
among others that:
a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will endeavor to
conclude the same within 30 days.
d) The management will provide 15 wagons for the workers and that existing workforce prior to the actual strike
will be given priority. However, in case the said workforce would not be enough, the management can hire
additional workers to supplement them.
However, alleging that Union failed to load the 15 wagons, Hacienda reneged on its commitment to sit down and bargain
collectively. Instead, it employed all means including the use of private armed guards to prevent the organizers from
entering the premises.
Moreover, Hacienda did not any more give work assignments to Union forcing the union to stage a strike. But due to the
conciliation efforts by the DOLE, another MOA was signed.
However, Hacienda again reneged on its commitment and so Union filed a complaint against Hacienda. LA dismissed the
complaint and found that they refused to work and were choosy in the kinds of jobs they wanted to perform. NLRC
reversed and held that they were illegally dismissed. It also ordered Hacienda to reinstate them with backwages.
CA affirmed NLRC. It held that while the work of Union was seasonal in nature, they were considered to be merely on
leave during the off-season and were therefore still employed by Hacienda. Moreover, the workers enjoyed security of
tenure.
CA found neither rhyme nor reason in Hacienda’s argument that it was the workers themselves who refused to or were
choosy in their work. The record of this case is replete with Union’s persistence and dogged determination in going back
to work. It likewise found that Hacienda were guilty of ULP.
Issue: W/N Union were seasonal workers yet regular employees? YES
Ruling:
Article 280 of the Labor Code, as amended, states:
except where the employment has been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall

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continue while such activity exist.
For Union to be excluded from those classified as regular employees, it is not enough that they perform work or
services that are seasonal in nature. They must have also been employed only for the duration of one season. The
evidence proves the existence of the first, but not of the second condition. The fact that they repeatedly worked as
sugarcane workers for several years is not denied by Hacienda. Evidently, Hacienda employed them for more than one
season. Therefore, the general rule of regular employment is applicable.
In Abasolo v. NLRC on the test of whether or not an employee is a regular employee:
The primary standard of determining regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the usual trade or business of the employer. The
connection can be determined by considering the nature of the work performed and its relation to the scheme
of the particular business or trade in its entirety. Also if the employee has been performing the job for at least a
year, even if the performance is not continuous, the law deems repeated and continuing need for its performance
as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while such activity exists.
This Court has already settled that seasonal workers who are called to work from time to time and are
temporarily laid off during off-season are not separated from service in said period, but merely considered on
leave until re-employed.
Union, having performed the same tasks for Hacienda every season for several years, are considered its regular
employees for their respective tasks. Hacienda’s eventual refusal to use their services -- even if they were ready, able
and willing to perform their usual duties whenever these were available -- and hiring of other workers to perform the tasks
originally assigned to respondents amounted to illegal dismissal of the latter.
Hacienda claims that it was a valid exercise of their management prerogative. The sudden changes in work assignments
reeked of bad faith. These changes were implemented immediately after respondents had organized themselves into a
union and started demanding collective bargaining
Where there is no showing by the employer of a clear, valid and legal cause for the termination of employment, the law
considers the matter a case of illegal dismissal. In the case at bar, Hacienda failed to prove any such cause for the
dismissal of respondents who are regular employees.
ULP? YES. Indeed, from its refusal to bargain, to their acts of economic inducements resulting in the promotion of
those who withdrew from the union, the use of armed guards to prevent the organizers to come in, and the dismissal
of union officials and members, one cannot but conclude that Hacienda did not want a union in their hacienda clear
interference in the right of the workers to self-organization.
Romares vs NLRC, PILMICO Foods Corp
Romares alleged that he was hired by Pilmico in its Maintenance/Projects/Engineering Department during the periods and
at respective rates as follows:
1. Sept. 1, 1989 to Jan. 31, 1990 - P 89.00/day 2. Jan.16, 1991 to Jun. 15, 1991 - 103.00/day
3. Aug. 16, 1992 to Jan. 15, 1993 - 103.00/day
He claims that having rendered a total service of more than 1 year and by operation of law, he has become a regular
employee of Pilmico. He has performed tasks and functions which were necessary and desirable in the operation of
Pilmico’s business which include painting, maintenance, repair and other related jobs. Without any legal cause or
justification and in the absence of any time to know of the charge or notice nor any opportunity to be heard, Pilmico
terminated him. He thus prays that he be awarded damages and be reinstated to his former position, be awarded
backwages, moral and exemplary damages and attorneys fees.
Pilmico maintains that he was a former contractual employee and as such his employment was covered by contracts. He
was hired as mason in the Maintenance/Project Department and that he was engaged only for a specific project. His

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services as mason was not continuous, in fact, he was employed with International Pharmaceuticals, Inc. from Jan to April
1992. When his last contract expired it was no longer renewed and thereafter, he filed this instant complaint.
Executive Labor Arbiter found that Romares was a regular employee and ordered him reinstated with backwages:
The fact that complainant was hired, terminated and rehired again for 3 times in a span of more than 3 years and
performing the same functions, only bolstered our findings that he is already considered a regular employee.
There is no dispute that he has already served Pilmico for more than 6 months, the period allowable for
probationary period, and even more than 1-year service which under the law shall be considered a regular
employee.
It is the intent and spirit of the law that the status of regular employment is attached to the worker on the day
immediately after the end of his first year of service
NLRC reversed and found that his employment was for a specific project and for a fixed period only.
Issue: W/N Romares was a regular employee? YES.
Ruling:
In determining the status of Romares as a regular employee, reference is made to Article 280 LC. Thus, the 2 kinds of
regular employees are (1) those who are engaged to perform activities which are necessary or desirable in the usual
business or trade of the employer; and (2) those casual employees who have rendered at least 1 year of service, whether
continuous or broken, with respect to the activity in which they are employed.
The phrase usually “necessary or desirable in the usual business or trade of the employer” should be emphasized as the
criterion in the instant case. Facts show that Romares’ work as a mason with PILMICO as a mason was definitely
necessary and desirable to its business in the production of flour, yeast, feeds and other flour products.
It is noteworthy that during each rehiring, the summation of which exceeded 1 year, Romares was assigned to PILMICOs
Maintenance/Projects/Engineering Department performing the same kind of maintenance work. Such a continuing
need for his services is sufficient evidence of the necessity and indispensability of his services to PILMICOs business
or trade. The fact that he was employed with another company in the interregnum from January to April, 1992 is of no
moment.
Granting arguendo that he was regarded as a temporary employee, he had been converted into a regular employee by
virtue of the proviso in the second par of Article 280 for having worked with PILMICO for more than 1 year. 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. Hence, the employment is also considered regular but only with respect to such activity and while
such activity exists.
Fixed term? NO. The leading case of Brent School vs . Zamora proves instructive. We have upheld the legality of fixed-
term employment. The decisive determinant in term employment should not be the activities that the employee is called
upon to perform but the day certain agreed upon by the parties for the commencement and termination of their
employment relationship. But this Court went on to say that where from the circumstances it is apparent that the 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 and morals. The Brent ruling also laid down the criteria under which term
employment cannot be said to be in circumvention of the law on security of tenure:
1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force,
duress, or improper pressure being brought to bear upon the employee and absent any other circumstances
vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms
with no moral dominance exercised by the former or the latter.

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None of these requisites were complied with.
EXTENDED PERIOD
Audion Electric Co vs NLRC and Madolid
Madolid was employed by Audion as fabricator and continuously rendered service assigned in different offices or projects
as helper electrician, stockman and timekeeper. He has rendered 13 years of continuous service with a clean record.
Madolid was surprised to receive a letter informing him that he will be considered terminated after the turnover of
materials not later than August 15, 1989.
He claims that he was dismissed without justifiable cause and due process and that his dismissal was done in BF which
renders the dismissal illegal. He claims that he is entitled to reinstatement with full backwages. He also claims that he is
entitled to moral and exemplary damages. He includes payment of his OT pay, project allowance, minimum wage increase
adjustment, proportionate 13th month pay and attorneys fees.
On its part, Audion relied on its unverified letter-communication signed by its project manager which said:
A. ILLEGAL DISMISSAL- There is no cause to complain since employment contract signed by him is co-
terminus with the project.
B. UNPAID WAGES- Admitting that salary payment was delayed due to late remittance of collection from Audion’s
Japanese prime contractor but nonetheless settled with Madolid as evidenced by signed Payroll Slips.
C. 13th MONTH PAY- There was a relative delay in the remittance of collection payment from our Japanese prime
contractor but Madolid knowing the economic predicament of complainant has seen to it that respondent be
satisfied without awaiting for remittance of 13th month from its Japanese contractor. attached is a... in full
satisfaction of the enumerated complaints made by MADOLID, we pray that charges against respondent be
withdrawn and dropped.
LA ruled for Madolid and ordered Audion to reinstate him with backwages as well as OT pay and his project allowances,
th
minimum wage increase adjustment, proportionate 13 month, M/E damages and attys fees. NLRC affirmed.
Issue: W/N Madolid was a project employee? NO.
Ruling:
Madolid’s employment status was established by the Certification of Employment issued by Audion which certified that
he is a bonafide employee of Audion from 1976 up to the time the certification was issued on 1989. The same
certificate of employment showed that Madolid’s exposure to their field of operation was as fabricator, helper/electrician,
stockman/timekeeper. This proves that he was regularly and continuously employed in various job assignments for a
total of 13 years. The alleged gap in employment service cited by Audion does not defeat his regular status as he
was rehired for many more projects without interruption and performed functions which are vital, necessary and
indispensable to the usual business of Audion.
Where the employment of project employees is extended long after the supposed project has been finished, the
employees are removed from the scope of project employees and considered regular employees. Madolid had presented
substantial evidence to support his position, while Audion merely presented an unverified position paper. It failed to
present such COE for a specific project signed by Madolid that would show that his employment with Audion was for the
duration of a particular project.
Moreover, Audion failed to present any report of termination. It should have submitted as many reports of termination
as there were construction projects actually finished, considering that Madolid had been hired since 1976.
Policy Instruction No. 20 of the DOL is explicit that employers of project employees are exempted from the clearance
requirement but not from the submission of termination report. Failure of the employer to file termination reports after
every project completion is an indication that Madolid was not a project employee. DO 19 superseding PI No. 20

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expressly provides that the report of termination is one of the indications of project employment.
Money awards? One who pleads payment has the burden of proving it. Audion failed to disprove the claims of Madolid.
REPEATED RENEWAL OF CONTRACT
Maraguinot and Enero vs NLRC, Viva Films
Maraguinot maintains that he was employed by Viva as part of the filming crew with a salary of P375 per week. 4 months
later, he was designated Assistant Electrician with a weekly salary of P400, which was increased to P450 in May 1990.
In June 1991, he was promoted to the rank of Electrician with a weekly salary of P593.
Enero, on his part, claims that Viva employed him in June 1990 as a member of the shooting crew with a weekly salary
of P375, which was increased to P425 then to P475.
Their tasks consisted of loading, unloading and arranging movie equipment in the shooting area as instructed by the
cameraman, returning the equipment to Viva’s warehouse, assisting in the fixing of the lighting system, and performing
other tasks that the cameraman and/or director may assign.
In 1992, they sought the assistance of their supervisor, Mrs. Cesario, to facilitate their request that Viva adjust their salary
in accordance with the minimum wage law. Mrs. Cesario informed them that Mr. del Rosario would agree to increase their
salary only if they signed a blank COE. As they refused to sign, Viva forced Enero to go on leave, then refused to take
him back when he reported for work. Meanwhile, Maraguinot was dropped from the company payroll for about 2 weeks
and then he was returned. He was again asked to sign a blank COE, and when he still refused, Viva terminated his
services. M and E thus sued for ID before the LA.
Viva claims it is primarily engaged in the distribution and exhibition of movies -- but not in the business of making movies;
in the same vein, del Rosario is merely an executive producer, i.e., the financier who invests a certain sum of money for
the production of movies distributed and exhibited by VIVA.
Viva asserts that they contract persons called producers/associate producers -- to produce or make movies for Viva; and
contend that M and E are project employees of the associate producers who, in turn, act as independent contractors. As
such, there is no EER between them.
They further contend that it was the associate producer of the film Mahirap Maging Pogi, who hired Maraguinot. When the
shooting finished, Maraguinot was released upon payment of his last salary. Anent Enero, he was hired for the movie
entitled Sigaw ng Puso, later re-titled Narito ang Puso. He went on vacation and by the time he reported for work,
shooting for the movie had already been completed.
LA found that both were employees of Viva and that they were illegally dismissed. It held that the producer was a labor-
only contractor and that Viva was the one giving the salaries of M and E. It held that M and E are doing activities which
are necessary and essential to the business of Viva, Maraguinot as an electrician and Enero as a crew.
NLRC reversed and held that they were hired for specific movie projects and their employment was co-terminus with
each movie project which are pre-determined and made known to them at the time of their engagement. It held that they
had irregular workloads and irregular work schedules.
Issue: W/N M and E are project employees? NO, regular
Ruling:
First, we must determine if there is EER. Viva contends that they were employees of associate producers who were
independent contractors. However, the movie-making equipment are supplied to the producers and owned by VIVA.
VIVA likewise owns the trucks used to transport the equipment It is thus clear that the associate producer merely leases
the equipment from VIVA.

Page 10 of 87
Thus, Viva is the direct employer of M and E. The EER between M & E and VIVA can further be established by the 4-fold
test. All four elements are present. VIVAs control is evident in its mandate that the end result must be a quality film
acceptable to the company. The means and methods to accomplish the result are likewise controlled by VIVA, viz., the
movie project must be finished within schedule without exceeding the budget, and additional expenses must be
justified; certain scenes are subject to change to suit the taste of the company; and the Supervising Producer, the eyes
and ears of VIVA and del Rosario, intervenes in the movie-making process by assisting the associate producer in solving
problems encountered in making the film.
Moreover, their appointment slips state that they “shall comply with the duties and responsibilities of your position as well
as observe the rules and regulations promulgated by your superiors and by Top Management”. Superiors and Top
Management can only refer to the superiors and Top Management of VIVA. The element of Selection and Engagement is
also present as seen in their Appointment Slips.
ID? YES (Since M and E are regular employees, the reason for their dismissal (completion of a project) is not a valid one
and they were thus illegally dismissed and must be reinstated)
Viva expressly admitted that M and E were part of a work pool and, while they were initially hired possibly as project
employees, they had attained the status of regular employees in view of VIVAs conduct. A project employee or a
member of a work pool may acquire the status of a regular employee when the following concur:
1) There is a continuous rehiring of project employees even after cessation of a project;
2) The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual
business or trade of the employer.
However, the length of time during which the employee was continuously re-hired is not controlling, but merely serves as
a badge of regular employment.
Here, Enero was employed for a total of 2 years and engaged in at least 18 projects, while Maraguinot was employed for
3 years and worked on at least 23 projects. Moreover, their tasks were vital, necessary and indispensable to the usual
business or trade of the employer. In the Lao case we held:
A work pool may exist although the workers in the pool do not receive salaries and are free to seek other
employment during temporary breaks in the business, provided that the worker shall be available when called
to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be
applied to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to
both the employer and employee for it prevents the unjust situation of coddling labor at the expense of capital and
at the same time enables the workers to attain the status of regular employees.
Truly, the cessation of construction activities at the end of every project is a foreseeable suspension of work. Of
course, no compensation can be demanded from the employer because the stoppage of operations at the end of
a project and before the start of a new one is regular and expected by both parties to the labor relations. Similar to
the case of regular seasonal employees, the employment relation is not severed by merely being suspended. The
employees are not separated from services but merely on leave of absence without pay until they are
reemployed. Thus we cannot affirm the argument that non-payment of salary or non-inclusion in the payroll and
the opportunity to seek other employment denote project employment.
While Lao admittedly involved the construction industry, to which PI 20/DO 19 regarding work pools specifically applies,
there seems to be no impediment to applying the underlying principles to industries other than the construction industry.
There is no substantial distinction between the projects undertaken in the construction industry and the motion picture
industry. Both industries concern projects with a foreseeable suspension of work.
The import of this decision is not to impose a positive and sweeping obligation upon the employer to re-hire project
employees. What this decision merely accomplishes is a judicial recognition of the employment status of a project or work
pool employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the employer of project or work
pool employees who perform tasks necessary or desirable to the employers usual business or trade.
Let it not be said that this decision coddles labor project or work pool employees who have gained the status of regular
employees are subject to the no work-no pay principle. The Courts ruling here is meant precisely to give life to the

Page 11 of 87
constitutional policy of strengthening the labor sector, but, we stress, not at the expense of management. This ruling does
not mean that simply because an employee is a project or work pool employee even outside the construction industry, he
is deemed, ipso jure, a regular employee. All that we hold today is that once a project or work pool employee has been:
(1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2)
these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee
must be deemed a regular employee, pursuant to Article 280 LC and jurisprudence.
UST vs Samahang Manggagawa ng UST, Pontesor, Clacer, Buisa, Nazareth
Samahang Manggagawa ng UST and Pontesor, et al. filed a complaint for regularization and illegal dismissal against
UST before the NLRC. They alleged that on various periods from 1990-1999, UST repeatedly hired them to perform
various maintenance duties within its campus, i.e., as laborer, mason, tinsmith, painter, electrician, welder, carpenter.
They insisted that in view of their performance of such maintenance tasks throughout the years, they should be deemed
regular employees. They further argued that for as long as UST continues to operate and exist as an educational
institution, with rooms, buildings, and facilities to maintain, UST could not dispense with their services which are
necessary and desirable to the business of UST.
While UST admitted that it repeatedly hired Pontesor, et al. in different capacities throughout the years, it maintained that
they were merely hired on a per-project basis, as evidenced by numerous Contractual Employee Appointments (CEAs)
signed by them. It pointed out that each of the CEAs that they signed defined the nature and term of the project to
which they are assigned, and that each contract was renewable in the event the project remained unfinished upon the
expiration of the specified term. In their CEAs, their project employment were automatically terminated: (a) upon the
expiration of the specific term specified in the CEA; (b) when the project is completed ahead of such expiration; or (c) in
cases when their employment was extended due to the non-completion of the specific project for which they were hired,
upon the completion of the said project.
LA held that they were illegally dismissed and ordered UST to reinstate them with backwages. It held that they should be
deemed regular employees since: (a) they have rendered at least 1 year of service (b) the activities for which they were
hired for are vital or inherently indispensable to the maintenance of the buildings or classrooms where UST’s classes were
held; and (c) their CEAs were contrived to preclude them from obtaining security of tenure.
NLRC reversed and found that they knowingly and voluntarily entered into fixed term contracts and could not have been
illegally dismissed. This notwithstanding, the NLRC rejected UST’s contention that they should be deemed project
employees, ratiocinating that their work were not usually necessary and desirable to UST’s main business, which is to
provide education. NLRC classified them as mere fixed term casual employees.
CA reversed and reinstated LA ruling that they were regular employees. It held that they cannot be considered as merely
fixed term or project employees since (a) they performed work that is necessary and desirable to UST’s business, as
evidenced by their repeated rehiring and UST’s continuous need for their services; and (b) the specific undertaking or
project for which they were employed were not clear as the project description set forth in their respective CEAs were
either too general or too broad.
Issue: W/N Pontesor et al are regular employees? YES. They are regularized casual employees.
Ruling:
Article 295 LC distinguishes project employment from regular employment as follows:
Art. 295 [280]. The provisions of written agreement to the contrary notwithstanding and regardless of the oral
which has been determined at the time of the engagement of the employee or where the work or services to be
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any

Page 12 of 87
Under the foregoing provision, the law provides for 2 types of regular employees, namely: (a) those who are engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the employer (first category);
and (b) those who have rendered at least 1 year of service, whether continuous or broken, with respect to the activity in
which they are employed (second category).
The primary standard of determining regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is
usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by
considering the nature of work performed and its relation to the scheme of the particular business or trade in its
entirety. Also, if the employee has been performing the job for at least a year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity and while such activity exists.
A review of Pontesor, et al. 's respective CEAs reveal that UST repeatedly rehired them for various positions in the
nature of maintenance workers, such as laborer, mason, painter, tinsmith, electrician, carpenter, and welder, for various
periods spanning the years 1990-1999. While the nature of work are not necessary and desirable to UST’s usual
business as an educational institution, nonetheless, their respective cumulative periods of employment each exceed 1
year. They fall under the second category of regular employees. They should be deemed as regular employees but
only with respect to the activities for which they were hired and for as long as such activities exist.
Project employees? NO.
The principal test for determining whether particular employees are properly characterized as "project-based employees"
is whether or not the employees were assigned to carry out a "specific project or undertaking," the duration and
scope of which were specified at the time they were engaged for that project.
The project could either be (1) a particular job or undertaking that is within the regular or usual business of the employer
company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company; or (2)
a particular job or undertaking that is not within the regular business of the corporation.
In order to safeguard the rights of workers against the arbitrary use of the word "project" to prevent employees from
attaining a regular status, employers claiming that their workers are project[-based] employees should not only
prove that the duration and scope of the employment was specified at the time they were engaged, but also, that
there was indeed a project.
Here, the specific undertakings or projects for which they were employed were not clearly delineated. Their respective
CEAs merely state that they were tasked "to assist" in various carpentry, electrical, and masonry work. In view of the
foregoing, Pontesor, et al. should be considered regularized casual employees who enjoy security of tenure. Hence,
Pontesor, et al. must be reinstated to their former or equivalent positions, with full backwages and without loss of seniority
rights.
PROJECT EMPLOYEE DEFINITION
Hanjin Heavy Industries and Construction Co and Hak Kon Kim, Adajar vs Ibanez, Carolino, Gacula, Dagotdot,
Calda
HANJIN is a foreign company engaged in the construction business in the Philippines. Hak Kon Kim and Adajar were
employed as Project Director and Supervisor by HANJIN.
Ibañez et al filed a complaint before the NLRC for ID with prayer for reinstatement and full backwages against Hanjin.
They alleged that HANJIN hired them for various positions on different dates (Tireman, Crane Operator, Welder, Welder,
Warehouseman). They stated that their tasks were usual and necessary or desirable in the usual business or trade of
HANJIN. They averred that they were employed as members of a work pool for Hanjin’s construction projects; with the
exception of Calda, who as a warehouseman was required to work in HANJIN's main office.
Hanjin dismissed them from employment. They claimed that at the time of their dismissal, HANJIN had several

Page 13 of 87
construction projects that were still in progress, such as MRT II and MRT III, and continued to hire employees to fill the
positions vacated by them.
Hanjin claimed that they were hired as project employees for the construction of the LRT/MRT Line 2 Package 2 and 3
Project. HANJIN and Ibanez et al purportedly executed COEs, in which it was clearly stipulated that they were to be hired
as project employees for a period of only 3 months which automatically terminate at the end of the project/phase, but that
the contracts are automatically renewed if there is no Notice of Termination by Hanjin (later on they said there were no
COEs due to lapse of mgt).
Hanjin asserted that they were duly informed of HANJIN's policies, rules and regulations, as well as the terms of their
contracts. Copies of the employees' rules and regulations were posted on the bulletin boards of all HANJIN campsite
offices.
Hanjin further emphasized that prior to their termination, Kim notified them of the company's intention to reduce its
manpower due to the completion of the LRT/MRT Line 2 Package 2 and 3 Project. Ibanez et al were among the
project employees who were thereafter laid off, as shown in the Establishment Termination Report filed by HANJIN before
the DOLE.
Finally, Hanjin insist that in accordance with the usual practice of the construction industry, a completion bonus was
paid to them. They offered as evidence payroll records with the words "completion bonus" written at the lower left corner
of each page.
Hanjin attached copies of the Quitclaims, executed by Ibanez et al. employees concerned were cleared of all
accountabilities.
LA found that they were regular employees who were illegally dismissed and ordered their reinstatement with
backwages. It held that Hanjin was not able to prove that they were project employees. It also noted that a termination
report should be presented after the completion of every project or a phase thereof and not just the completion of one of
these projects. It construed the number of years that they rendered their services as an indication that they were regular
employees.
NLRC reversed and said that they were project employees validly terminated. It gave probative value to the Termination
Report submitted by HANJIN to the DOLE, receipts signed by Ibanez et al for their completion bonus, and the Quitclaims.
It also observed that the records were devoid of any proof to support Ibanez et al’s allegation that they were employed
before 1997, the time when construction work on the MRT started.
CA reversed NLRC. It adjudged the Termination Report as inconclusive proof that they were project employees.
Emphasizing that the employer had the burden of proving the legality of the dismissal, the it ruled that Ibanez et al were
regular employees and that they were illegally dismissed.
Issue: W/N Ibanez et al are project employees? NO. Regular employees illegally dismissed (twin requirements were not
followed)
Ruling:
Article 280 LC distinguishes a "project employee" from a "regular employee". The principal test for determining whether
particular employees are properly characterized as "project employees" as distinguished from "regular employees" is
whether or not the project employees were assigned to carry out a "specific project or undertaking," the duration and
scope of which were specified at the time the employees were engaged for that project.
The length of service or the re-hiring of construction workers on a project-to-project basis does not confer upon
them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced
construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other
undertakings of the company, the scope and duration of which has been determined and made known to the employees
at the time of the employment, are properly treated as project employees and their services may be lawfully terminated
upon the completion of a project.
It crucial that the employees were informed of their status as project employees. In this case, Hanjin did not have that

Page 14 of 87
kind of agreement with Ibanez et al. Neither did they inform them of the nature of their work at the time of hiring. Hence,
we are constrained to declare them as regular employees. There has to be the employees' knowing consent to being
engaged as project employees.
During the proceedings before the LA, Hanjin’s failure to produce Ibanez et al’s COEs was already noted, and in their
appeal before the NLRC, Hanjin now claims that due to a lapse in management procedure, no such COEs were executed;
nonetheless, the absence of a written contract does not remove Ibanez et al from the ambit of being project
employees.
While the absence of a written contract does not automatically confer regular status, it has been construed by this Court
as a red flag in cases involving the question of whether the workers concerned are regular or project employees.
In cases where this Court ruled that construction workers repeatedly rehired retained their status as project employees,
the employers were able to produce COEs clearly stipulating that the workers' employment was coterminous with the
project to support their claims that the employees were notified of the scope and duration of the project.
Absent any other proof that the project employees were informed of their status as such, it will be presumed that they
are regular employees in accordance with Clause 3.3(a) of DO 19-1993:
a) Project employees whose aggregate period of continuous employment in a construction company is at

least one year shall be considered regular employees, in the absence of a "day certain" agreed upon by
the parties for the termination of their relationship. Project employees who have become regular shall be entitled
to separation pay.
Hanjin calls attention to the fact that they complied with 2 of the indicators of project employment under Section 2.2(e) and
(f) of DO 19:
2.2 Either one or more of the following circumstances, among others, may be considered as indicators that an
employee is a project employee.
(e) The termination of his employment in the particular project/undertaking is reported to the DOLE
Regional Office having jurisdiction over the workplace within 30 days following the date of his separation
from work, using the prescribed form on employees' terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the employer to pay completion bonus to the project
employee as practiced by most construction companies.
However, Hanjin did not present other Termination Reports apart from that filed on 11 April 2002. The failure of an
employer to file a Termination Report every time a project or a phase thereof is completed indicates that Ibanez et al were
not project employees. Only the last and final termination of Ibanez et al was reported to the DOLE.
Completion bonus indicates that they were project employees? NO.
Ibanez et al deny receiving any such amount. Assuming they actually paid them a completion bonus, Hanjin failed to
present evidence showing that they undertook to pay them such a bonus upon the completion of the project, as provided
under Section 2.2(f) of DO 19. Hanjin did not even allege how the "completion bonus" was to be computed or the
conditions that must be fulfilled before it was to be given. A completion bonus, if paid as a mere afterthought, cannot be
used to determine whether or not the employment was regular or merely for a project.
DO 19 provides that in the absence of an undertaking that the completion bonus will be paid to the employee, the
employee may be considered a non-project employee.
Furthermore, after examining the payroll documents submitted by Hanjin, we find the payments termed as "completion
bonus" are not the completion bonus paid in connection with the termination of the project. First of all, the period from 4
April 2002 to 20 April 2002, as stated in the payrolls, bears no relevance to a completion bonus. A completion bonus is
paid in connection with the completion of the project, and is not based on a 15-day period. Secondly, the amount paid to
each employee as his completion bonus was uniformly equivalent to his 15-day wages, without consideration of the
number of years of service rendered. Section 3.4 of DO 19 provides that based on industry practice, the completion
bonus is at least the employee's 1/2 month salary for every twelve months of service.

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PRINCIPAL TEST OF PROJECT EMPLOYMENT
William Uy Construction Corp and Uy vs Trinidad
Trinidad filed a complaint for ID and unpaid benefits against William Uy Construction Corp. Trinidad claimed that he
had been working with WUCC for 16 years as driver of its service vehicle, dump truck, and transit mixer. He had
signed several COEs that identified him as a project employee although he had always been assigned to work on one
project after another with some intervals.
Trinidad further alleged that WUCC terminated him from work after it shut down operations because of lack of projects.
He learned later, however, that although it opened up a project in Batangas, it did not hire him back for that project.
WUCC countered that it was in the construction business. By the nature of such business, it had to hire and engage the
services of project construction workers whose employments had to be co-terminous with the completion of specific
company projects.
It stressed that employment intervals or gaps were inherent in the construction business. Consequently, after it finished its
Boni Serrano-Katipunan Interchange Project, Trinidad’s work ended as well. In compliance with labor rules, the company
submitted an establishment termination report to the DOLE.
LA dismissed the complaint. However, it ordered WUCC to pay Trinidad P1,500.00 in unpaid SIL. It held that, since
Trinidad was a project employee and since his company submitted the appropriate establishment termination report to
DOLE, his loss of work cannot be regarded as unjust dismissal. It found no basis for granting overtime pay, holiday pay,
and 13th month pay.
NLRC affirmed. CA reversed and held that the repeated hiring of Trinidad over several years as project employee for
various projects automatically entitled him to the status of regular employee. (35 projects in 16 years).
Issue: W/N Trinidad is a project employee? YES, regardless of no. of years
Ruling:
The test for distinguishing a project employee from a regular employee is whether or not he has been assigned to carry
out a specific project or undertaking, with the duration and scope of his engagement specified at the time his service is
contracted. Here, WUCC contracted Trinidad’s service by specific projects with the duration of his work clearly set
out in his employment contracts. He remained a project employee regardless of the number of years and the
various projects he worked for WUCC.
Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis
becomes a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if
applied to the construction industry, simply because construction firms cannot guarantee work and funding for its
payrolls beyond the life of each project. Construction companies have no control over the decisions and resources of
project proponents or owners.
For this reason, Caseres v. Universal Robina we held that the repeated and successive rehiring of project employees do
not qualify them as regular employees, as length of service is not the controlling determinant of the employment tenure of
a project employee, but whether the employment has been fixed for a specific project or undertaking, its
completion has been determined at the time of the engagement of the employee.
Trinidad’s series of employments were co-terminous with its projects. When its Boni Serrano-Katipunan Interchange
Project was finished, Trinidad’s employment ended with it. He was not dismissed. His employment history belies the claim
that he continuously worked for the company. Intervals or gaps separated one contract from another.
WUCC submitted only the termination report covering Trinidads’ last project thus it failed to satisfy such requirement? NO.

Page 16 of 87
Trinidad did not say in his complaint that he had been illegally dismissed after each of the projects for which he had been
signed up. His complaint was essentially that he should have been rehired from the last project since he had already
acquired the status of a regular employee. Consequently, WUCC needed only to show the last status of his employment.
DM Consunji Corp vs Bello
Bello brought a complaint for ID and damages against DMCI claiming that DMCI had employed him as a mason without
any interruption from Feb 1, 1990 until Oct 10, 1997; that his job as a mason had been necessary and desirable in the
usual business of DMCI; that he had been diagnosed with pulmonary tuberculosis, thereby necessitating his leave of
absence; that upon his recovery, he had reported back to work, but DMCI had refused to accept him and had instead
handed to him a termination paper; that he had been terminated due to “RSD”, that he did not know the meaning of
“RSD”; that he had not been given prior notice of his termination; that he had not been paid separation pay; that at that
time of his dismissal, DMCI’s projects had not yet been completed; and that even if he had been terminated due to
an authorized cause, he should have been given at least 1 month pay or at least 1/2 month pay for every year of service
he had rendered, whichever was higher.
DMCI contended that Bello had only been a project employee, as borne out by his COE and appointment papers. After
his termination, it had complied with the reportorial requirements of the DOLE pursuant to the mandates of PI 20, as
revised by DO 19; and that although his last project employment contract had been set to expire on Oct 7, 1997, he had
tendered his voluntary resignation on Oct 4, 1997 for health reasons.
LA held that there was ID and ordered DMCI to reinstate Bello with backwages. NLRC reversed and found that he was a
mere project employee and that there were gaps in his employment. It found that DMCI complied with PI 20 and that Bello
executed a voluntary resignation (even though handwriting is different).
CA reversed and found that there was illegal dismissal. It found that Bello was a regular employee although he started out
as a project employee by his having been repeatedly hired as a mason performing tasks that had been usually necessary
and desirable in the business of DMCI continuously from 1990 to 1997. DMCI’s compliance with PI 20 could not preclude
the acquisition of tenurial security by the employee. It found that his supposedly voluntary resignation could not be
accorded faith since the handwriting was “undeniably different from that of Bello”.
Issue: W/N Bello is a project employee?
Ruling:
A project employee is one who is hired for a specific project or undertaking, and the completion or termination of such
project or undertaking has been determined at the time of engagement of the employee. In the context of the law, Bello
was a project employee of DMCI at the beginning of their EER. The project employment contract they then entered into
clearly gave notice to him at the time of his engagement about his employment being for a specific project or phase of
work. He was also thereby notified of the duration of the project, and the determinable completion date of the project.
However, the history of Bello’s appointment and employment showed that he performed his tasks as a mason in DMCI’s
various constructions projects, thus, he acquired in time the status of a regular employee by virtue of his continuous
work as a mason of DMCI. The work of a mason like him was really related to building or constructing, and was
undoubtedly a function necessary and desirable to the business or trade of DMCI. His being hired as a mason in several
of DMCI’s projects revealed his necessity and desirability to its construction business.
It is settled that the extension of the employment of a project employee long after the supposed project has been
completed removes the employee from the scope of a project employee and makes him a regular employee. In this
regard, the length of time of the employee’s service, while not a controlling determinant of project employment, is a strong
factor in determining whether he was hired for a specific undertaking or in fact tasked to perform functions vital, necessary
and indispensable to the usual business or trade of the employer.
How DMCI chose to categorize the employment status of Bello was not decisive of his employment status. What
were of consequence in that respect were his actual functions and the length of his stay with DMCI. Verily, the principal
test for determining whether an employee is a project employee, as distinguished from a regular employee, is
whether or not he is assigned to carry out a specific project or undertaking, the duration and scope of which are
specified at the time he is engaged for the project.
Resigned? NO. Bello denied having resigned, explaining that he had signed the letter because DMCI had made him

Page 17 of 87
believe that the letter was for the purpose of extending his sick leave.
We could not give credence to the voluntary resignation in the face of Bello’s declaration that he had been led to sign the
letter to obtain the extension of his leave of absence due to illness, and that “the handwriting in the supposed resignation
letter is undeniably different from that of Bello.
Malicdem & Flores vs Marulas Industrial Corporation, Mancilla
Malicdem and Flores filed a complaint for ID, separation pay, money claims, moral and exemplary damages, and
attorney’s fees against Marulas and Mancilla, who were engaged in the business of manufacturing sacks intended for
local and export markets.
M and F were first hired as extruder operators in 2006, responsible for the bagging of filament yarn, the quality of pp yarn
package and the cleanliness of the work place area. Their COEs were for a period of 1 year. Every year thereafter, they
would sign a Resignation/Quitclaim in favor of Marulas a day after their contracts ended, and then sign another contract
for 1 year. Until one day in 2010, Flores was told not to report for work anymore after being asked to sign a paper by
Marulas’ HR Head to the effect that he acknowledged the completion of his contractual status. In 2011, Malicdem was
also terminated after signing a similar document.
Marulas countered that their contracts showed that they were fixed–term employees for a specific undertaking which
was to work on a particular order of a customer for a specific period. Their severance from employment was due to the
expiration of their contracts.
LA dismissed the complaints saying that M and F were not terminated and that their employment naturally ceased when
their contracts expired. The LA, however, ordered Marulas to pay M and F their respective wage differentials. NLRC
affirmed. CA affirmed but removed the payment of backwages, separation pay, damages and atty fees.
Issue: W/N M and F were project employees? NO, regular. Illegally dismissed, reinstate + bakwages
Ruling:
A reading of the 2008 COE denominated as “Project Employment Agreement,” reveals that there was a stipulated
probationary period of 6 months. It was provided that in the event that they would be able to comply with the company’s
standards and criteria within such period, they shall be reclassified as project employees with respect to the remaining
period of the effectivity of the contract.
Under Article 281 LC, however, “an employee who is allowed to work after a probationary period shall be considered a
regular employee.” No employer is allowed to determine indefinitely the fitness of its employees. While length of time is
not the controlling test for project employment, it is vital in determining if the employee was hired for a specific undertaking
or tasked to perform functions vital, necessary and indispensable to the usual business of trade of the employer.
Thus, in Maraguinot, Jr. v. NLRC, it was ruled that a project or work pool employee, who has been: (1) continuously, as
opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) those tasks are
vital, necessary and indispensable to the usual business or trade of the employer, must be deemed a regular employee.
The test to determine whether employment is regular or not is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the employer. If the employee has been
performing the job for at least 1 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.
There was clearly a deliberate intent to prevent the regularization of M and F. First, there is no actual project. The only
stipulations in the contracts were the dates of their effectivity, their duties and responsibilities as extruder operators, the
rights and obligations of the parties, and their compensation and allowances.
Next, granting that they were project employees, they could only be considered as regular employees as the 2 factors
enumerated in Maraguinot are present in this case. It is undisputed that they were continuously rehired by the same
employer for the same position. They were responsible for the operation of machines that produced the sacks. Hence,

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their work was vital, necessary and indispensable to the usual business or trade of the employer.
Marulas cannot use the alleged expiration of their COEs as a shield of their illegal acts. The project COEs that they were
made to sign every year since the start of their employment were only a stratagem to violate their security of tenure in the
company.
Omni Hauling Services, Lolita & Aniceto Franco vs Bon et al
Omni, a company owned by the Francos, was awarded a 1-year service contract by the local government of Quezon City
to provide garbage hauling services from July 1, 2002 to June 30, 2003. For this purpose, Omni hired Bon et al as
garbage truck drivers and paleros who were paid on a per trip basis.
When the service contract was renewed for another year, Omni required each of Bon et al to sign COEs which provided
that they will be “re-hired” only for the duration of the same period. However, Bon et al refused to sign the COEs, claiming
that they were regular employees since they were engaged to perform activities which were necessary and desirable to
Omni’s usual business or trade. For this reason, Omni terminated their employment. Bon et al filed a complaint for ID,
nonpayment of ECOLA and 13th month pay, and actual, moral, and exemplary damages.
LA dismissed the complaint and held that Bon et al were informed at the time of their engagement that their employment
will be limited to 1 year and was co-terminus with the service contract, thus they were mere project employees. NLRC
affirmed.
CA reversed and held that no COE exists to support the allegation that they were project employees. It held that by the
time they were asked to sign the COEs, they were already regular employees by operation of law. It added that in order to
be deemed as project employees, it is not enough that an employee is hired for a specific project or phase of work; there
must also be a determination of, or a clear agreement on, the completion or termination of the project at the time the
employee was engaged. It ordered Omni to reinstate Bon et al or if no longer feasible, separation pay, with backwages in
either case.
Issue: W/N Bon et al were project employees? NO, illegal dismissal
Ruling:
The principal test for determining whether particular employees are properly characterized as “project employees” as
distinguished from “regular employees,” is whether or not the employees were assigned to carry out a “specific project or
undertaking,” the duration and scope of which were specified at the time they were engaged for that project.
The project could either be (1) a particular job or undertaking that is within the regular or usual business of the employer
company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company; or (2) a
particular job or undertaking that is not within the regular business of the corporation. Employers claiming that their
workers are project employees should not only prove that the duration and scope of the employment was specified at
the time they were engaged, but also that there was indeed a project.
Even though the absence of a written contract does not by itself grant regular status to Bon et al, such a contract is
evidence that they were informed of the duration and scope of their work and their status as project employees. The
absence of the COE raises a serious question of whether the employees were properly informed of their
employment status as project employees at the time of their engagement.
In this case, records are bereft of any evidence to show that Bon et al were made to sign COEs explicitly stating that
they were going to be hired as project employees, with the period of their employment to be co-terminus with the original
period of Omni’s service contract. Neither is Omni’s allegation that they were duly apprised of the project-based nature of
their employment supported by any other evidentiary proof.
As such, the presumption of regular employment should be accorded in their favor pursuant to Article 280 which
provides that “employees who have rendered at least 1 year of service, whether such service is continuous or broken—as
Bon et al in this case—shall be considered as regular employees with respect to the activity in which they are employed
and their employment shall continue while such activity actually exists.” Add to this the obvious fact that they have been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of Omni.

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Thus, their services could not have been validly terminated at the expiration of the project. As regular employees, it is
incumbent upon Omni to establish that they had been dismissed for a just and/or authorized cause. However, Omni failed
in this respect.
Innodata Knowledge Services Inc (IKSI) vs Inting et al
IKSI is a company engaged in data processing, encoding, indexing, and other processes in the capture, conversion, and
storage of data and information. Applied Computer Technologies (ACT), a company based in the US, hired IKSI to
review various litigation documents. ACT required IKSI to hire lawyers, or at least, law graduates, to review various
litigation documents, classify said documents into the prescribed categories, and ensure that outputs are delivered on
time. For this purpose, IKSI engaged the services of Inting, et al as senior and junior reviewers with a contract duration
of 5 years.
In 2010, however, Inting et al received a Notice of Forced Leave from IKSI informing them that they shall be placed on
indefinite forced leave effective that same day due to changes in business conditions, client requirements, and
specifications. Hence, Inting et al filed a complaint for illegal dismissal, reinstatement or payment of separation pay,
backwages, and damages against IKSI.
Subsequently, IKSI sent them separate notices informing them that due to the unavailability of new work related to the
product stream and uncertainties pertaining to the arrival of new workloads, their project employment contracts would
have to be terminated.
LA held that they were project employees and their contracts specifically indicated that they were to hold their positions for
the duration of the project and that there was no illegal dismissal. They were placed on forced leave as a cost-saving
measure and ordered IKSI to recall Inting et al back to work as soon as work becomes available or if no longer feasible,
separation pay. NLRC affirmed.
CA reversed and held that Inting et al were illegally dismissed. It held that their COEs were fixed-term, which are
contrary to the Constitution and Labor laws because they prevent employees from acquiring tenurial rights and
benefits.
Issue: W/N Inting et al were mere project employees? NO, regular. (They entered into fixed term, but the COEs are
suspect)
Ruling:
Article 295 LC provides the distinction between a regular and a project employment:
which has been determined at the time of the engagement of the employee or where the work or service to be
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any
Art 295 provides 4 kinds of employees: (1) regular employees or those who have been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those
whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee; (3) seasonal employees or those who work or perform
services which are seasonal in nature, and the employment is for the duration of the season; and (4) casual employees or
those who are not regular, project, or seasonal employees. Jurisprudence later added a 5th kind, the fixed-term employee.
The law determines the nature of the employment, regardless of any agreement expressing otherwise.

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Project employment contracts, which fix the employment for a specific project or undertaking, are valid under the law.
By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the
project. But project employment contracts are not lopsided agreements in favor of only one party. The employer's interest
is equally important as that of the employees'.
Indeed, records would disclose that Inting et al signed COEs specifically indicating the ACT Project as the project for
which they were being hired, which was expected to be completed after a maximum of 5 years. However, sometime in
Nov 2008, IKSI required them to work on another project called "Bloomberg," which was not included in the original
contracts that they signed and without entering into a new project employment contracts. Months later, reverted to their
previous designation as Document Reviewers in the ACT project.
In order to safeguard the rights of workers against the arbitrary use of the word "project" which prevents them from
attaining regular status, employers claiming that their workers are project employees have the burden of showing
that: (a) the duration and scope of the employment was specified at the time they were engaged; and (b) there was
indeed a project. The test for determining whether particular employees are properly characterized as project employees,
as distinguished from regular employees, is whether or not the employees were assigned to carry out a specific project or
undertaking, the duration and scope of which were specified at the time the employees were engaged for that project
Here, while IKSI was able to show the presence of a specific project in the contract and the alleged duration of the
same, it failed to prove that Inting et al were in reality made to work only for that specific project and that it
adequately informed them of the duration and scope of said project at the time their services were engaged. The fact is
IKSI actually hired Inting et al to work also on other similar projects such as the Bloomberg.. This act brought them
outside the realm of the project employees’ category.
IKSI likewise fell short in proving that the duration of the project was reasonably determinable at the time Inting et
al were hired. The COEs provided for "the duration of the Project, which is expected to be completed after a maximum of
5 years, or on or before ___." The 5-year period is not actually the duration of the project but merely that of the
COE. The completion of the 5-year period would depend on when each employee was employed. This is precisely why
IKSI originally left a blank for the termination date. If respondents were truly project employees, then the termination date
would have been uniform for all of them.
It would appear, however, that Inting et al indeed entered into fixed-term COEs with a fixed period of 5 years. But
project employment and fixed-term employment are not the same. While the former requires a particular project, the
duration of a fixed-term employment agreed upon by the parties may be any day certain, which is understood to be "that
which must necessarily come although it may not be known when." The decisive determinant in fixed-term employment is
not the activity that the employee is called upon to perform but the day certain agreed upon by the parties for the
commencement and termination of the employment relationship.
We have previously recognized the validity of fixed-term employment contracts, but it has consistently held that this is
more of an exception rather than the general rule. Where from the circumstances it is apparent that the periods have been
imposed to preclude acquisition of tenurial security by the employee, they should be struck down as contrary to public
policy or morals.
It is evident that IKSI's COEs are suspect for being highly ambiguous. In effect, it sought to alternatively avail of
project employment and employment for a fixed term so as to preclude the regularization of Inting et al’s status. The
fact that they were lawyers or law graduates who freely and with full knowledge entered into an agreement with the
company is inconsequential. The utter disregard of public policy by the subject contracts negates any argument that the
agreement is the law between the parties and that the fixed period was knowingly and voluntarily agreed upon by the
parties. In the interpretation of contracts, obscure words and provisions shall not favor the party that caused the obscurity.
Thus, there were no valid fixed-term or project contracts and Inting et al were IKSI's regular employees who could not
be dismissed except for just or authorized causes.
Just/Authorized cause for termination? NONE.
Article 298, speaks of permanent retrenchment as opposed to temporary lay-off, as in the present case. There is no
specific provision of law which treats of a temporary retrenchment or lay-off and provides for the requisites in effecting it or
a specific period or duration. Notably, in both permanent and temporary lay-offs, the employer must act in good faith.
Pursuant to Art. 301, the law set 6 months as the period where the operation of a business may be suspended, thereby

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also suspending the employment of the employees concerned. After the period of 6 months, the employees should either
then be recalled to work or permanently retrenched following the requirements of the law. Failure to comply with this
requirement would be tantamount to dismissing the employees, making the employer responsible for such dismissal.
In this case, the records are bereft of any evidence of actual suspension of IKSI's business operations or even of the
ACT Project alone. IKSI never alleged that it had actually suspended the subject undertaking to justify such lay-off. It
merely indicated changes in business conditions and client requirements and specifications as its basis for the
implemented forced leave/lay-off. In fact, IKSI still continued its operations and retained several employees who
were also working on the ACT Project even after the implementation of the forced leave. Much worse, it continued to hire
new employees, with the same qualifications as some of respondents, through paid advertisements and placements in
Sunstar Cebu.
There being no valid suspension of business operations, IKSI's act amounted to constructive dismissal.
WORKPOOL EMPLOYEES
J & D.O. Aguilar Corp vs NLRC, Acedillo
Acedillo began working for JDO in Feb 1989 as a helper-electrician. In 1992, he received a letter from JDO informing
him of his severance from the company allegedly due to lack of available projects and excess in the number of workers
needed.
He decided to file a case for ID before the NLRC after learning that new workers were being hired by JDO while his
request to return to work was being ignored.
JDO maintained that its need for workers varied, depending on contracts procured in the course of its business of
contracting refrigeration and other related works. It contended that its workers are hired on a contractual or project
basis, and their employment is deemed terminated upon completion of the project for which they were hired. Finally, it
argued that Acedillo was not a regular employee because his employment was for a definite period and made only to
augment the regular work force.
LA ruled that Acedillo was illegally dismissed, finding him to be a member of the regular work pool, and ordered JDO to
pay him backwages, 13th month pay, separation pay in lieu of reinstatement, SIL pay and underpayment of wages. NLRC
affirmed saying
The nature of his job as a helper and the length of service that he had been with JDO are clear proofs that he was
a regular employee. For what determines whether a certain employment is regular or casual is not the will and
word of the employer, but the nature of the activities performed in relation to the particular business or trade of the
employer considering all circumstances, and in some cases the length of time of its performance and its
continued existence. Suffice it to state that JDO’s contention to show that Acedillo was a regular employee will not
prosper because in the absence of any proof that he was hired on a project or contractual basis, the valid
presumption is that the employment is regular.
Issue: W/N Acedillo is a project employee? NO
Ruling:
A project employee is one whose "employment has been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement of the employee or where the work or services to
be performed is seasonal in nature and the employment is for the duration of the season." JDO did not specify the
duration and scope of the undertaking at the time Acedillo's services were contracted. It is not even clear if Acedillo
ever signed an employment contract with JDO. Neither is there any proof that the duration of his assignment was made
clear to him other than the self-serving assertion of JDO that the same can be inferred from the tasks he was made to
perform.
What is clear is that Acedillo's work as a helper-electrician was an activity "necessary or desirable in the usual
business or trade" of JDO, since refrigeration requires considerable electrical work. This necessity is further bolstered by
the fact that JDO would hire him anew after the completion of each project, a practice which persisted throughout the

Page 22 of 87
duration of his tenure.
JDO admits that it maintains 2 sets of workers: 1) those who are permanently employed and get paid regardless of the
availability of work and 2) those who are hired on a project basis. This practice of keeping a work pool further renders
untenable its position that Acedillo is not a regular employee. In Philippine National Construction Corporation v. NLRC:
"Members of a work pool from which a construction company draws its project employees, if considered
employees of the construction company while in the work pool, are non-project employees or employees for
an indefinite period. If they are employed in a particular project, the completion of the project or any phase
thereof will not mean severance of the EER”.
CASUAL NATURE OF WORK
Hacienda Leddy/Gamboa vs Villegas
Villegas is an employee at the Hacienda Leddy since 1960, when it was still named Hacienda Teresa. Later on named
Hacienda Leddy owned by Gamboa, the same was succeeded by his son Gamboa, Jr. During his employment up to the
time of his dismissal, Villegas performed sugar farming job 8 hours a day, 6 days a week work, continuously for not less
than 302 days a year, and for which services he was paid ₱45 per day. He likewise worked in Gamboa’s coconut lumber
business where he was paid ₱34 a day for 8 hours work.
In 1993, Gamboa went to Villegas' house and told him that his services were no longer needed without prior notice or
valid reason. Hence, Villegas filed the instant complaint for ID.
Gamboa denied having dismissed Villegas but admitted that Villegas indeed worked with the said farm owned by his
father, doing casual and odd jobs until the latter's death in 1993. He was even given the benefit of occupying a small
portion of the land where his house was erected. He, however, maintained that Villegas ceased working at the farm as
early as 1992.
However, later, Gamboa retracted and instead insisted that Villegas rendered service for the hacienda was only in 1993,
specifically Feb 9, 1993 and Feb 11, 1993 when he was contracted by the farm to cut coconut lumber which were given to
regular workers for the repairs of their houses. Gamboa added that they informed Villegas that they need the property,
hence, they requested that he vacate it, but he refused. Thus, Gamboa surmised that Villegas filed the instant complaint
to gain leverage so he would not be evicted. He further argued that during his employment, Villegas was paid in
accordance with the rate mandated by law and that his claim for ID was merely a fabrication as he was the one who opted
not to work.
LA found that there was illegal dismissal and ordered that he be paid backwages and SP. NLRC reversed. CA reinstated
the LA decision.
Issue: W/N Villegas is a regular employee? YES.
Ruling:
Villegas, having been employed in the Hacienda while the same was still being managed by Gamboa’s father until his
death in 1993, is undisputed.
If we are to follow the length of time that Villegas had worked with the Gamboas, it should be more than 20 years of
service. Even Gamboa admitted that Villegas was given a privilege of erecting his house inside the hacienda during his
employment. While it may indeed be an act of good will on the part of the Gamboas, still, such act is usually done by the
employer either out of gratitude for the employee’s service or for the employer's convenience as the nature of the work
calls for it. Indeed, Villegas’ length of service is an indication of the regularity of his employment. Even assuming
that he was doing odd jobs around the farm, such long period of doing said odd jobs is indicative that the same was either
necessary or desirable to Gamboa’s trade or business. Owing to the length of service alone, he became a regular
employee, by operation of law, one year after he was employed.

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Article 280 describes a regular employee as one who is either (1) engaged to perform activities which are necessary or
desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one
year of service, whether continuous or broken, with respect to the activity in which he is employed.
In Integrated Contractor v. NLRC we held that the test to determine whether employment is regular or not is the
reasonable connection between the particular activity performed by the employee in relation to the usual business or trade
of the employer. 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. Clearly, with more than 20 years of service,
Villegas, without doubt, passed this test to attain employment regularity.
Paid on piece-rate basis? Does not negate regular employment. "The term ‘wage’ is broadly defined in Article 97 LC as
remuneration or earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task,
piece or commission basis. Payment by the piece is just a method of compensation and does not define the essence of
the relations."
Villegas suddenly stopped working? Considering that he was employed with the Gamboas for more than 20 years and
was even given a place to call his home, it does not make sense why Villegas would suddenly stop working therein for no
apparent reason. To justify a finding of abandonment of work, there must be proof of a deliberate and unjustified refusal
on the part of an employee to resume his employment. The burden of proof is on the employer to show an unequivocal
intent on the part of the employee to discontinue employment. Mere absence is not sufficient. It must be accompanied by
manifest acts unerringly pointing to the fact that the employee simply does not want to work anymore.
Petitioner failed to discharge this burden. On the contrary, the filing of the instant ID complaint negates any intention on
his part to sever their EER.
Casual Employee? NO.
We ruled in Baguio Country Club v. NLRC that "its language evidently manifests the intent to safeguard the tenurial
interest of the worker who may be denied the rights and benefits due a regular employee by virtue of lopsided agreements
with the economically powerful employer who can maneuver to keep an employee on a casual status for as long as
convenient." Thus, notwithstanding any agreements to the contrary, what determines whether a certain employment is
regular or casual is not the will and word of the employer, much less the procedure of hiring the employee or the manner
of paying his salary. It is the nature of the activities performed in relation to the particular business or trades considering
all circumstances, and in some cases the length of time of its performance and its continued existence.
All these having discussed, as a regular worker, Villegas is entitled to security of tenure and can only be removed for
cause. We found no valid cause attending to his dismissal and found also that his dismissal was without due process.
Separation pay is be granted since reinstatement is no longer feasible due to strained relations.
ONE-YEAR SERVICE: REG EE
Integrated Contractor and Plumbing Works vs NLRC, Solon
ICPW is a plumbing contractor. Its business depends on the number and frequency of the projects it is able to contract
with its clients. Solon worked for various times (10 times) from 1994 to 1998. In 1998, while Solon was about to log out
from work, he was informed by the warehouseman that the main office had instructed them to tell him it was his last day
of work as he had been terminated. When he went to ICPW’s office to verify his status, he found out that indeed, he had
been terminated. He went back to ICPW’s office to sign a clearance so he could claim his 13th month pay and tax
refunds. However, he had second thoughts and refused to sign the clearance when he read the clearance indicating he
had resigned. He filed a complaint alleging that he was illegally dismissed without just cause and without due process.
ICPW asserts that he was a project employee. Thus, when the project was completed and he was not re-assigned to
another project, petitioner did not violate any law since it was petitioners discretion to re-assign the private respondent to
other projects
LA ruled that he was a regular employee and could only be removed for cause. ICPW was ordered to reinstate him with
full backwages and pay him SIL pay, and 13th month pay for 3 years. NLRC affirmed. CA affirmed.

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Issue: W/N Solon is a project employee? Initially yes, but became regular.
Ruling:
Article 280 of the Labor Code states:
The provisions of written agreement of the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where
the employment has been fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.
We held in Tomas Lao v. NLRC, that the principal test in determining whether an employee is a project employee or
regular employee, is, whether he is assigned to carry out a specific project or undertaking, the duration and scope of
which are specified at the time the employee is engaged in the project. Project refers to a particular job or undertaking that
is within the regular or usual business of the employer, but which is distinct and separate and identifiable from the
undertakings of the company. Such job or undertaking begins and ends at determined or determinable times.
In our review of the employment contracts of Solon, he was initially a project employee. The services he rendered, the
duration and scope of each project are clear indications that he was hired as a project employee.
While there were several COEs between Solon and ICPW, in all of them, he performed tasks which were usually
necessary or desirable in the usual business or trade of ICPW. His work assignments patently showed he belonged to
a work pool tapped from where workers are and assigned whenever their services were needed. In a work pool, the
workers do not receive salaries and are free to seek other employment during temporary breaks in the business. They are
like regular seasonal workers insofar as the effect of temporary cessation of work is concerned. This arrangement is
beneficial to both the employer and employee for it prevents the unjust situation of coddling labor at the expense of capital
and at the same time enables the workers to attain the status of regular employees. Nonetheless, the pattern of re-hiring
and the recurring need for his services are sufficient evidence of the necessity and indispensability of such services to
petitioners business or trade.
In Maraguinot, Jr. v. NLRC we ruled that once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital,
necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a
regular employee.
In this case, did Solon become a regular employee then?
The test to determine whether employment is regular or not is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the employer. Also, 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. Thus, we held that where the employment of project employees is extended long after the
supposed project has been finished, the employees are removed from the scope of project employees and are considered
regular employees.
While length of time may not be the controlling test for project employment, it is vital in determining if the employee was
hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or
trade of the employer.
Here, Solon had been a project employee several times over. His employment ceased to be coterminous with
specific projects when he was repeatedly re-hired due to the demands of ICPW’s business.
Further, PI 20 requires employers to submit a report of an employee’s termination to the nearest PEO every time his
employment was terminated due to a completion of a project. The failure of the employer to file termination reports is an
indication that the employee is not a project employee. DO 19 superseding PI 20 also expressly provides that the report of

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termination is one of the indications of project employment.
n the case at bar, there was only one list of terminated workers submitted to DOLE. If Solon was a project employee,
ICPW should have submitted a termination report for every completion of a project to which the former was
assigned.
Juxtaposing his employment history, vis the requirements in the test to determine if he is a regular worker, we are
constrained to say he is.
As a regular worker, he is entitled to security of tenure and can only be removed for cause. We found no valid cause
attending to his dismissal and found also that his dismissal was without due process.
An illegally dismissed employee is entitled to reinstatement with full backwages, inclusive of allowances, and to his other
benefits computed from the time his compensation was withheld from him up to the time of his actual reinstatement,
pursuant to Article 279 of the Labor Code.
However, we note that he had been paid his 13th month pay for the year 1997. CA erred in granting the same to him.
Article 95(a) of the Labor Code governs the award of SIL. Accordingly, his SIL credits of five days for every year of
service, based on the actual service rendered to the petitioner, in accordance with each contract of employment should be
computed up to the date of reinstatement pursuant to Article 279 LC.
FIXED TERM: LEGAL BASIS
Brent School Inc, Rev. Dimache vs Zamora, Alegre

Alegre was engaged by Brent as athletic director. The contract fixed a specific term for its existence, 5 years (from July
18, 1971 to July 17, 1976). Subsequent subsidiary agreements reiterated the same terms and conditions, including the
expiry date, as those contained in the original contract.
3 months before the expiration of the stipulated period, Alegre was given a copy of the report filed by Brent with the DOL
advising of the termination of his services on the ground of "completion of contract, expiration of the definite period of
employment." And a month or so later, Alegre accepted the amount of P3,177.71, and signed a receipt therefor "in full
payment of services for the period May 16, to July 17, 1976 as full payment of contract."
However, at the investigation conducted by a Labor Conciliator of said report of termination of his services, Alegre
protested the termination of his employment. He argued that although his contract did stipulate that the same would
terminate on July 17, since his services were necessary and desirable in the usual business of his employer, and his
employment had lasted for 5 years, he had acquired the status of a regular employee and could not be removed
except for valid cause.
RD considered Brent School's report as an application for clearance to terminate employment (not a report of termination)
and refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent employee with
full back wages. It pronounced "the ground relied upon by Brent in terminating the services of Alegre is not sanctioned
by the Labor Code and, prohibited by Circular No. 8 of the Bureau of Private Schools.
SOLE affirmed RD. OP affirmed, ruling that Alegre was a permanent employee who could not be dismissed except for
just cause, and expiration of the COE was not one of the just causes provided in the Labor Code.
Issue: W/N the provisions of the Labor Code, as amended, have anathematized "fixed period employment" or
employment for a term? NO.
Ruling:
The COE between Brent and Alegre was executed in 1971, when the Labor Code had not yet been promulgated (Nov. 1,
1974). Before the advent of the Labor Code, there was no doubt whatever about the validity of term employment. It was
impliedly but nonetheless clearly recognized by the Termination Pay Law. Prior, thereto, it was the Code of Commerce
which governed employment without a fixed period, and also implicitly acknowledged the propriety of employment with a

Page 26 of 87
fixed period.
Now, the Civil Code itself deals with obligations with a period and with contracts of labor and for a piece of work. No
prohibition against term-or fixed-period employment is contained in any of its articles or is otherwise deducible
therefrom.
It is plain then that when the employment contract was signed between Brent and Alegre, it was perfectly legitimate for
them to include in it a stipulation fixing the duration thereof. The status of legitimacy continued to be enjoyed by fixed-
period employment contracts under the Labor Code. The Code contained explicit references to fixed period
employment.
Nevertheless, obscuration of the principle of licitness of term employment began to take place at about this time.
Article 320, entitled "Probationary and fixed period employment," originally stated that the "termination of employment of
probationary employees and those employed WITH A FIXED PERIOD shall be subject to such regulations as the SOL
may prescribe." The asserted objective to was "prevent the circumvention of the right of the employee to be secured in
their employment as provided in the Code”.
Article 321 prescribed the just causes for which an employer could terminate "an employment without a definite period."
And Article 319 undertook to define "employment without a fixed period" in the following manner:
An employment shall be deemed to be without a definite period for purposes of this Chapter 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 performed is seasonal in nature and the employment is for the duration of the season.
The question immediately provoked by a reading of Article 319 is whether or not a voluntary agreement on a fixed term or
period would be valid where the employee "has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer." The definition seems a non sequitur. There is nothing essentially
contradictory between a definite period of an employment contract and the nature of the employee's duties set down in
that contract as being "usually necessary or desirable in the usual business or trade of the employer."
The concept of the employee's duties as being "usually necessary or desirable in the usual business or trade of the
employer" is not synonymous with employment with a fixed term. Logically, the decisive determinant in term
employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon
by the parties for the commencement and termination of their employment relationship, a day certain being
understood to be "that which must necessarily come, although it may not be known when." Seasonal employment, and
employment for a particular project are merely instances employment in which a period, where not expressly set down,
necessarily implied.
Subsequently, the foregoing articles regarding employment with "a definite period" and "regular" employment were
amended by PD 850. Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating
the reference to persons "employed with a fixed period," and was renumbered ( now Article 271). The article 22 now
reads:
. . .Probationary employment—Probationary employment shall not exceed 6 months from the date the employee
started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of
an employee who has been engaged in a probationary basis may be terminated for a just cause or 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 his engagement. An employee who is allowed to work after a probationary period shall be
considered a regular employee.
Also amended by PD 850 was Article 319 by (a) deleting mention of employment with a fixed or definite period, (b)
adding a general exclusion clause declaring irrelevant written or oral agreements "to the contrary," and (c) making the
provision treat exclusively of "regular" and "casual" employment. As revised, said article, renumbered 270, 23 now reads:
. . . Regular and Casual Employment.—The provisions of written agreement to the contrary

notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to

Page 27 of 87
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 he 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.
The first paragraph is identical to Article 319 except that a clause has been added, to wit: "The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreements of the parties”. The clause would
appear to be addressed to agreements fixing a definite period for employment.
There is withal no clear indication of the intent to deny validity to employment for a definite period. Indeed, not only is the
concept of regular employment not essentially inconsistent with employment for a fixed term, as above pointed out, Article
272 LC, still impliedly acknowledged the propriety of term employment: it listed the "just causes" for which "an employer
may terminate employment without a definite period," thus giving rise to the inference that if the employment be with
a definite period, there need be no just cause for termination thereof if the ground be precisely the expiration of the
term agreed upon by the parties for the duration of such employment.
Still later, however, said Article 272 was further amended by BP 130, to eliminate altogether reference to employment
without a definite period. The opening lines of the article now read: "An employer may terminate an employment for any of
the following just causes: " BP 130 thus completed the elimination of every reference in the Labor Code, express or
implied, to employment with a fixed or definite period or term.
Is it then the legislative intention to outlaw stipulations in employment contracts laying down a definite period therefor?
Are such stipulations in essence contrary to public policy and should not on this account be accorded legitimacy?
On the one hand, there is the gradual and progressive elimination of references to term or fixed-period employment in the
Labor Code.
There is, 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. Under the Civil Code, fixed-term employment contracts are not limited 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.
Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor for specific
projects, but to which a fixed term is an essential and natural appurtenance: overseas employment contracts; also
appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in
educational institutions, which are by practice rotated among the faculty members. Similarly, despite the provisions of
Article 280, PI 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 down, in providing that these
officials," . . . may lose their jobs as president, executive vice-president or vice-president, etc. because the stockholders or
the board of directors for one reason or another did not re-elect them."
There can of course be no quarrel with the proposition that 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, etc. But where no such intent to circumvent the law is shown, or 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 termination is a sine qua non,
would an agreement fixing a period be essentially evil or illicit, therefore anathema?
As it is evident from even only the 3 examples already given, that Article 280 LC, 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 avoided. The law must
be given a reasonable interpretation.

Page 28 of 87
Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article
280 clearly appears to have been to prevent circumvention of the employee's right to be secure in his tenure, the
clause 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.
Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of employment as still good
rule. Alegre's employment was terminated upon the expiration of his last contract with Brent without the
necessity of any notice. The advance written advice given the DOL with copy to Zamora 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 DOL.
Basan et al, NLRC vs Coca-Cola Bottlers Philippines
Basan et al filed a complaint for ID with money claims against Coca-Cola, alleging that it dismissed them without just
cause and prior written notice required by law. Coca Cola countered that it hired them as temporary route helpers to act
as substitutes for its absent regular route helpers merely for a fixed period in anticipation of the high volume of work in its
plants or sales offices.
LA ruled for Basan et al and found that since they were performing activities necessary and desirable to the usual
business of Coca Cola for more than the period for regularization, they are considered as regular employees, and thus,
their dismissal was done contrary to law. Thus, it ordered Coca-Cola to reinstate them with full backwages and to pay their
lump sum increase extended to them in their CBA, their accrued vacation and sick leave benefits, as well as monetary
awards and attorney’s fees.
NLRC affirmed. It stressed that nowhere in the records of the case was it shown that Basan et al were hired as project or
seasonal employees, Coca Cola having failed to submit any contract of project or other similar proof thereof. It also noted
that neither can they be considered as probationary employees for the fact that they had performed their services for more
than 6 months.
CA reversed and held that they were fixed-term employees and that Coca Cola’s repeated hiring for various periods would
not automatically categorize them as REGULAR EMPLOYEES. It being supported by facts on record and there being
no showing that the employment terms were foisted on the employees through circumstances vitiating their consent,
following Brent School vs. Zamora, they must be considered as fixed term employees.
Issue: W/N Basan et al are fixed term employees? NO.
Ruling:
It must be noted that the issue has already been resolved in Magsalin v. National Organization of Working Men, wherein
this Court has categorically declared that the nature of work of route helpers hired by Coca Cola Bottlers is
necessary and desirable in its usual business or trade thereby qualifying them as regular employees:
The argument of Coca Cola that its usual business is softdrink manufacturing and that the work assigned to
respondent workers as sales route helpers so involves merely "postproduction activities," one which is not
indispensable in the manufacture of its products, scarcely can be persuasive. If, as so argued by Coca Cola, only
those whose work are directly involved in the production of softdrinks may be held performing functions necessary
and desirable in its usual business or trade, there would have then been no need for it to even maintain
regular truck sales route helpers. The nature of the work performed must be viewed from a perspective of the
business or trade in its entirety and not on a confined scope.
The repeated rehiring of the workers and the continuing need for their services clearly attest to the necessity or
desirability of their services in the regular conduct of the business or trade of petitioner company. While this
Court, in Brent vs. Zamora, has upheld the legality of a fixed-term employment, it has done so, however, with a

Page 29 of 87
stern admonition that where from the circumstances it is apparent that the period has been imposed to preclude
the acquisition of tenurial security by the employee, then it should be struck down as being contrary to law,
morals, good customs, public order and public policy. The pernicious practice of having employees, workers and
laborers, engaged for a fixed period of few months, short of the normal six-month probationary period of
employment, and, thereafter, to be hired on a day-to-day basis, mocks the law. Any obvious circumvention of
the law cannot be countenanced.
At this point, it is worth recalling that Article 280 of the Labor Code, as amended, provides:
ART. 280. The provisions of written agreement to the contrary notwithstanding and regardless of the oral
except where the employment has been fixed for a specific project or undertaking, the completion or termination
of which has been determined at the time of the engagement of the employee or where the work or services to be
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any
Thus, there are 2 kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year
of service, whether continuous or broken, with respect to the activities in which they are employed. Simply stated, regular
employees are classified into: (1) regular employees by nature of work; and (2) regular employees by years of service.
Basan et al fall under the first kind of regular employee. As route helpers who are engaged in the service of loading
and unloading softdrink products of Coca Cola to its various delivery points, which is necessary or desirable in its usual
business or trade, they are considered as regular employees. That they merely rendered services for periods of less
than a year is of no moment since for as long as they were performing activities necessary to the business of respondent,
they are deemed as regular employees, irrespective of the length of their service.
Regular employees but only for a fixed period? NO.
Under the above Brent doctrine, while it was not expressly mentioned in the LC, this Court has recognized a fixed-term
type of employment embodied in a contract specifying that the services of the employee shall be engaged only for a
definite period, the termination of which occurs upon the expiration of said period irrespective of the existence of just
cause and regardless of the activity the employee is called upon to perform. Considering, however, the possibility of
abuse by employers, this Court, in Brent, laid down the following criteria to prevent the circumvention of the employee’s
security of tenure:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal
terms with no moral dominance exercised by the former or the latter.
There is no proof Basan et al freely entered into agreements with Coca Cola to perform services for a specified length
of time. In fact, there is nothing in the records to show that there was any agreement at all, the COEs not having been
presented. Even granting that the COEs were destroyed by fire, it could have easily submitted other pertinent files,
records, remittances, and other similar documents which would show the fixed period of employment voluntarily agreed
upon by the parties. They did not.
The records of this case reveal that for years, Basan et al were repeatedly engaged to perform functions necessary
to Coca Cola’s business for fixed periods short of the 6-month probationary period of employment. To this Court,
the act of hiring and re-hiring Basan et al for periods short of the legal probationary period evidences its intent to thwart
their security of tenure, especially in view of an awareness that ordinary workers are never on equal terms with their
employers. Consequently, for lack of any clear, valid, and just or authorized cause in terminating petitioners’ employment,
We find respondent guilty of illegal dismissal.

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FIXED TERM AS DIST. FROM PROJ. EE
GMA Network vs Pabriga et al
Due to the miserable working conditions Pabriga et al (Television Technicians) were forced to file a complaint against
GMA before the NLRC assailing their respective employment circumstances. They were engaged by GMA to perform the
ff activities:
1) Manning of Technical Operations Center:
(a) Responsible for the airing of local commercials; and (b) Logging/monitoring of national commercials
(satellite)
2) Acting as Transmitter/VTR men:
(a) Prepare tapes for local airing; (b) Actual airing of commercials; (c) Plugging of station promo; (d)
Logging of transmitter reading; and (e) In case of power failure, start up generator set to resume program;
3) Acting as Maintenance staff;
(a) Checking of equipment; (b) Warming up of generator; (c) Filling of oil, fuel, and water in radiator; and
4) Acting as Cameramen
GMA received a notice of hearing of the complaint. The following day, GMA’s Engineering Manager, Villacastin, confronted
Pabriga et al about the said complaint. They were summoned to the office of GMA’s Area Manager, Mrs. Aliño, and they
were made to explain why they filed the complaint. The next day, they were barred from entering and reporting for
work without any notice stating the reasons therefor.
Pabriga et al, through their counsel, wrote a letter to Mrs. Aliño requesting that they be recalled back to work.
A reply letter from Mr. Bustria, GMA’s head of Personnel and Labor Relations Division, admitted the non-payment of
benefits but did not mention the request of Pabriga et al to be allowed to return to work.
Pabriga et al sent another letter to Mr. Bustria reiterating their request to work but the same was totally ignored. They filed
an amended complaint raising the following additional issues: 1) ULP 2) ID 3) Damages and Attorney’s fees. A mandatory
conference was set to amicably settle the dispute, however, the same proved to be futile.
LA dismissed the complaint for ID and ULP, but held GMA liable for 13th month pay. NLRC reversed and held that they
were regular employees with respect to the particular activity to which they were assigned and thus, entitled to separation
th
pay. However, it deleted OT and HP, but awarded 13 mo./NSD/SIL pay. CA affirmed.
Issue: W/N Pabriga et al are project employees? NO.
Ruling:
At the outset, we should note that the nature of the employment is determined by law, regardless of any contract
expressing otherwise. GMA interchangeably characterize their employment as project and fixed period/fixed term
employment. Thus, there is need to clarify the terms.
The terms regular employment and project employment are taken from Article 280 LC, which also speaks of casual
and seasonal employment. A fifth classification, that of a fixed term employment, is not expressly mentioned in the LC.
Nevertheless, this Court ruled in Brent v. Zamora, that such a contract is not per se illegal or against public policy.

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Pursuant to Article 280, employees performing activities which are usually necessary or desirable in the employer’s usual
business or trade can either be regular, project or seasonal employees, while, as a general rule, those performing
activities not usually necessary or desirable in the employer’s usual business or trade are casual employees. The
consequence of the distinction is found in Article 279 LC, which provides:
ARTICLE 279. Security of tenure. – In cases of regular employment, the employer shall not terminate the services
of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement.
On the other hand, the activities of project employees may or may not be usually necessary or desirable in the
usual business or trade of the employer.
It is evidently important to become clear about the meaning and scope of the term "project" in the present context.
The "project" for the carrying out of which "project employees" are hired would ordinarily have some relationship to the
usual business of the employer. Exceptionally, the "project" undertaking might not have an ordinary or normal relationship
to the usual business of the employer. In this latter case, the determination of the scope and parameters of the "project"
becomes fairly easy. It is unusual for a company to undertake a project which has absolutely no relationship to the usual
business of the company; thus, for instance, it would be an unusual steel-making company which would undertake the
breeding and production of fish or the cultivation of vegetables.
From the viewpoint, however, of the legal characterization problem here presented to the Court, there should be no
difficulty in designating the employees who are retained or hired for the purpose of undertaking fish culture or the
production of vegetables as "project employees," as distinguished from ordinary or "regular employees," so long as the
duration and scope of the project were determined or specified at the time of engagement of the "project employees."
In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2)
distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the regular
or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other
undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. The typical
example of this first type of project is a particular construction job. A construction company ordinarily carries out two or
more [distinct] identifiable construction projects.
The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular business of
the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular
business operations of the employer. The job or undertaking also begins and ends at determined or determinable times.
Thus, in order to safeguard the rights of workers against the arbitrary use of the word "project" to prevent employees from
attaining the status of regular employees, employers claiming that their workers are project employees should not only
prove that the duration and scope of the employment was specified at the time they were engaged, but also that there
was indeed a project. As it was with regard to the distinction between a regular and casual employee, the purpose of this
requirement is to delineate whether or not the employer is in constant need of the services of the specified employee. If
the particular job or undertaking is within the regular or usual business of the employer company and it is not identifiably
distinct or separate from the other undertakings of the company, there is clearly a constant necessity for the performance
of the task in question, and therefore said job or undertaking should not be considered a project.
In the case at bar, Pabriga et al were assigned to tasks clearly within the regular or usual business of GMA and are
not identifiably distinct or separate from the other undertakings of GMA.
GMA’s allegation that they were merely substitutes or what they call pinch-hitters (employed to take the place of regular
employees who were absent or on leave) does not change the fact that their jobs cannot be considered projects within the
purview of the law. Every industry, even public offices, has to deal with securing substitutes for employees who are absent
or on leave. Such tasks cannot be considered separate and distinct from the other undertakings of the company.
Furthermore, if Pabriga et al were indeed project employees, GMA should have reported the completion of its projects and
their dismissal in its finished projects. We find that GMA’s theory of project employment fails the principal test of
demonstrating that the alleged project employee was assigned to carry out a specific project or undertaking, the
duration and scope of which were specified at the time the employee is engaged for the project.Even if it is assumed that

Page 32 of 87
they are project employees, they would nevertheless have attained regular employment status because of their
continuous rehiring.
GMA adverts to the fixed period allegedly designated in COEs and reflected in vouchers. GMA argues that Pabriga et al
were fully aware and freely entered into agreements to undertake a particular activity for a specific length of time. It
apparently confuses project employment from fixed term employment. The discussions cited by petitioner in Brent,
St. Theresa’s and Fabela all refer to fixed term employment, which is subject to a different set of requirements.
GMA interchangeably characterizes Pabriga et al’s service as project and fixed term employment. These types of
employment are not the same. While the former requires a project as restrictively defined above, the duration of a fixed-
term employment agreed upon by the parties may be any day certain, which is understood to be "that which must
necessarily come although it may not be known when." The decisive determinant in fixed-term employment is not the
activity that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement
and termination of the employment relationship.
We thus laid down indications or criteria under which "term employment" cannot be said to be in circumvention of the law
on security of tenure, namely:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force,
duress, or improper pressure being brought to bear upon the employee and absent any other circumstances
vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms
with no moral dominance exercised by the former or the latter.
These indications, which must be read together, make the Brent doctrine applicable only in a few special cases wherein
the employer and employee are on more or less in equal footing in entering into the contract. The reason for this is
evident: when a prospective employee, on account of special skills or market forces, is in a position to make demands
upon the prospective employer, such prospective employee needs less protection than the ordinary worker. Lesser
limitations on the parties’ freedom of contract are thus required for the protection of the employee.
To recall, in ID cases, the employer has the burden of proving with clear and convincing evidence that the dismissal was
valid. It is therefore the employer which must satisfactorily show that it was not in a dominant position of advantage in
dealing with its prospective employee.
Pabriga et al were repeatedly rehired in several fixed term contracts from 1996 to 1999. To prove the alleged contracts,
GMA presented cash disbursement vouchers signed by them, stating that they were merely hired as pinch-hitters. It is
apparent that they were in no position to refuse to sign these vouchers, as such refusal would entail not getting paid
for their services. Plainly, Pabriga et al as "pinch-hitters" cannot be considered to be in equal footing as GMA in the
negotiation of their employment contract.
In this case, since GMA refused to take them back , separation pay.
E Ganzon Inc (EGI), Ganzon vs Ando
Ando filed a complaint against EGI and its President Ganzon, for ID and money claims for: underpayment of salary, OT
pay, and 13th month pay; non-payment of holiday pay and SIL; illegal deduction; and attorneys fees. He alleged that he
was a regular employee working as a finishing carpenter in the construction business of EGI; he was repeatedly hired
from Jan 21, 2010 until April 30, 2011 when he was terminated without prior notice and hearing; his daily salary of 292.00
was below the amount required by law; and wage deductions were made without his consent, such as rent for the
barracks located in the job site and payment for insurance premium.
EGI countered that, as proven by the 3 project employment contract, Ando was engaged as a project worker in Bahay
Pamulinawen Project from June 1, 2010 to September 30,20107 and from January 3, 2011 to February 28,20118 as well
as in EGI West Insula Project from Feb 22, 2011 to March 31, 2011; he was paid the correct salary based on the Wage
Order applicable in the region; he already received the 13th month pay for 2010 but the claim for 2011 was not yet
processed at the time the complaint was filed; and he voluntarily agreed to pay 500 monthly for the cost of the barracks,
beds, water, electricity, and other expenses of his stay at the job site.

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th
LA dismissed finding he was a project employee but granted some of his money claims (salary differential, HP, SIL, 13
mo). NLRc affirmed. CA reversed and held that he was illegally dismissed.
Issue: W/N Ando was a project employee? YES.
Ruling:
The terms regular, project, seasonal and casual employment are taken from Article 280 LC. In addition, Brent v. Zamora
ruled that fixed-term employment contract is not per se illegal or against public policy. Under Art. 280, project employment
is one which "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." To be considered as project-based, the employer has the
burden of proof to show that: (a) the employee was assigned to carry out a specific project or undertaking and (b) the
duration and scope of which were specified at the time the employee was engaged for such project or undertaking. It
must be proved that the particular work/service to be performed as well as its duration are defined in the employment
agreement and made clear to the employee who was informed thereof at the time of hiring.
The activities of project employees may or may not be usually necessary or desirable in the usual business or
trade of the employer. In ALU-TUCP v. National Labor Relations Commission,27 2 categories of project employees
were distinguished:
In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2)
distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the
regular or usual business of the employer company, but which is distinct and separate, and identifiable as such,
from the other undertakings of the company. Such job or undertaking begins and ends at determined or
determinable times.
The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular
business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the
ordinary or regular business operations of the employer. The job or undertaking also begins and ends at
determined or determinable times.
In this case, the 3 project employment contracts signed by Ando explicitly stipulated the agreement "to engage his
services as a Project Worker" and that:
5. [His] services with the Project will end upon completion of the phase of work for which [he was] hired for
and is tentatively set on (written date). However, this could be extended or shortened depending on the work
phasing.
Records show that Ando's contracts for Bahay Pamulinawen Project were extended until December 31, 2010 (from the
original stated date of September 30, 2010) and shortened to February 15,2011 (from the original stated date of February
28, 2011) while his services in West Insula Project was extended until April 30, 2011 (from the original stated date of
March 31, 2011). These notwithstanding, he is still considered as a project, not regular, employee of EGI..
The Court has upheld the validity of a project-based contract of employment provided that the period 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; and it is apparent from the circumstances that the period was not imposed to preclude the
acquisition of tenurial security by the employee.
Here, Ando was adequately notified of his employment status at the time his services were engaged. The
contracts he signed consistently stipulated that his services as a project worker were being sought. His consent was not
vitiated. His being a carpenter does not suffice.
His employment was for a specific project or undertaking because the nature of EGI's business is one which will not
allow it to employ workers for an indefinite period. As a corporation engaged in construction and residential projects,
EGI depends for its business on the contracts it is able to obtain. Since work depends on the availability of such

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contracts, necessarily the duration of the employment of its work force is not permanent but coterminous with the projects
to which they are assigned and from whose payrolls they are paid. It would be extremely burdensome for EGI as an
employer if it would have to carry them as permanent employees and pay them wages even if there are no projects
for them to work on.
Project employment should not be confused and interchanged with fixed-term employment:
Proj. employment requires a project, the duration of a fixed-term employment agreed upon by the parties may be
any day certain. which is understood to be "that which must necessarily come although it may not be known
when." The decisive determinant in fixed-term employment is not the activity that the employee is called
upon to perform but the day certain agreed upon by the parties for the commencement and termination of the
employment relationship.40
The decisive determinant in project employment is the activity that the employee is called upon to perform and not the day
certain agreed upon by the parties for the commencement and termination of the employment relationship. Indeed, in
Filsystems, Inc. v. Puente,41 We even ruled that an employment contract that does not mention particular dates that
establish the specific duration of the project does not preclude one's classification as a project employee.
In this case, the duration of the specific/identified undertaking for which Ando was engaged was reasonably
determinable. Although the employment contract provided that the stated date may be "extended or shortened
depending on the work phasing," it specified the termination of the parties' employment relationship on a "day certain,"
which is "upon completion of the phase of work for which he was hired for."
The fact that Ando was required to render services necessary or desirable in the operation of EGI's business for more
than a year does not in any way impair the validity of his project employment contracts. The length of service through
repeated and successive rehiring is not the controlling determinant of the employment tenure of a project employee. The
rehiring of construction workers on a project-to-project basis does not confer upon them regular employment
status as it is only dictated by the practical consideration that experienced construction workers are more preferred. In
Ando's case, he was rehired precisely because of his previous experience working with the other phases of the
project. EGI took into account similarity of working environment. Moreover-
It is widely known that in the construction industry, a project employee's work depends on the availability of
projects, necessarily the. duration of his employment. It is not permanent but coterminous with the work to which
he is assigned. Once the project is completed it would be unjust to require the employer to maintain these
employees in their payroll. To do so would make the employee a privileged retainer who collects payment from his
employer for work not done. This is extremely unfair to the employers and amounts to labor coddling at the
expense of management.
Finally, the second paragraph of Article 280, stating that an employee who has rendered service for at least 1 year shall
be considered a regular employee, is applicable only to a casual employee and not to a project or a regular employee
referred to in paragraph one thereof.
The foregoing considered, EGI did not violate any requirement of procedural due process by failing to give Ando advance
notice of his termination. Prior notice of termination is not part of procedural due process if the termination is brought
about by the completion of the contract for which the project employee was engaged. Such completion automatically
terminates the employment and the employer is, under the law, only required to render a report to the DOLE on the
termination of employment. In this case, it is undisputed that EGI submitted the required Establishment Employment
Reports to DOLE-NCR regarding Ando's "temporary lay-off' effective Feb 16, 2011 and "permanent termination"
effective May 2, 2011.
NO IMPLIED RENEWAL OF EMPLOYMENT
Unica vs Anscor Swire Ship Management Corp
Anscor is a manning agency. In 1980, Unica was employed by Anscor under various contracts. In his last contract, he
was deployed for a period of 9 months. However, since the vessel was still at sea, he was only repatriated 20 days after
the expiration of his COE. Unica averred that since he was allowed to stay in the vessel for another 20 days, there
was an implied renewal of his contract of employment. Hence, when he was repatriated without a valid cause, he was
illegally dismissed.

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He filed a case against Anscor for ID, payment of retirement, disability and medical benefits, separation and holiday pay.
Anscor argued that he was hired for a fixed period, the duration of which depends upon the mutual agreement of the
parties. His employment was co-terminus with the term of his contract.
LA ruled in favor of Unica. It ruled that since he was not repatriated at the expiration of his contract and was allowed to
continue working on board its vessel, his contract was impliedly renewed for another 9 months. NLRC affirmed.
CA reversed saying there was no implied renewal of contract and the 20 days extension was due to the fact that the ship
was still at sea.
Issue: W/N there was an implied renewal of Unica’s COE? NO.
Ruling:
Although Unica’s COE with ended on October 25, and he disembarked only on November 14 or barely 20 days after the
expiration of his COE, such late disembarkation was not without valid reason. Anscor could not have disembarked
Unica on the date of the termination of his COE, because the vessel was still in the middle of the sea. Clearly, it was
impossible for him to safely disembark immediately upon the expiration of his contract. His stay in the vessel for
another 20 days should not be interpreted as an implied extension of his contract. A seaman need not physically
disembark from a vessel at the expiration of his COE to have such contract considered terminated.
It is a settled rule that seafarers are considered contractual employees. Their employment is governed by the contracts
they sign every time they are rehired and their employment is terminated when the contract expires. Thus, when Unica’s
contract ended on October 25, his employment is deemed automatically terminated, there being no mutually-agreed
renewal or extension of the expired contract.
However, he is entitled to be paid his wages after the expiration of his contract until the vessel's arrival at a
convenient port. Section 19 of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-
Board Ocean-Going Vessels is clear on this point:
A. If the vessel is outside the Philippines upon the expiration of the contract, the seafarer shall continue his
service on board until the vessel's arrival at a convenient port and/or after arrival of the replacement crew,
provided that, in any case, the continuance of such service shall not exceed three months. The seafarer shall
be entitled to earned wages and benefits as provided in his contract.
NON-RENEWAL OF CONTRACT IS MP
Fonterra Brands Phils Inc vs Largado and Estrellado
Fonterra contracted the services of Zytron Marketing and Promotions Corp. for the marketing and promotion of its milk
and dairy products. Zytron provided Fonterra with trade merchandising representatives (TMRs), including Largado and
Estrellado. The engagement of their services began on Sep 15, 2003 and May 27, 2002, respectively, and ended on June
6, 2006.
On May 3, 2006, Fonterra sent Zytron a letter terminating its promotions contract, effective June 5, 2006. Fonterra then
entered into an agreement for manpower supply with A.C. Sicat Marketing and Promotional Services. Desirous of
continuing their work as TMRs, L and E submitted their job applications with A.C. Sicat, which hired them for a term of
5 months (June 7, 2006 - Nov 6, 2006.)
When their 5-month contracts were about to expire, they sought renewal, but were refused. This prompted them to file
complaints for ID, regularization, non-payment of SIL and 13th month pay, and actual and moral damages, against
Fonterra, Zytron, and A.C. Sicat.
LA dismissed the complaint and ruled that there was no ID and they were the ones who refused to renew their contract
and that they voluntarily complied with the requirements for them to claim their corresponding monetary benefits in

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relation thereto; and (2) they were consecutively employed by Zytron and A.C. Sicat, not by Fonterra. NLRC affirmed.
CA held that AC was a legitimate job contractor, but Zytron was not (no substantial capital 250k only; Cert. of Reg. was
issued after L and E’s employment ended; no necessary tools). CA held that L and E were Fonterra’s employees and that
they were ID. It ordered reinstatement and backwages.
Issue: W/N L and E were illegally dismissed? NO.
Ruling:
Zytron is a labor-only contractor? Immaterial, L and E voluntarily termination their employment with Zytron.
Illegal Dismissal? NO. They in effect resigned, and resignation is inconsistent with ID.
Their termination was brought about by the cessation of their contracts with Zytron. They were the ones who refused to
renew their contracts with Zytron, and they themselves acquiesced to their transfer to A.C. Sicat. Thus, they effectively
resigned from Zytron.
Here, it is obvious that they were no longer interested in continuing their employment with Zytron. They wanted to
continue their assignment in Fonterra, and so they applied for work with A.C. Sicat with the hope that they will be able to
continue rendering services as TMRs at Fonterra since A.C. Sicat is Fonterra’s new manpower supplier. They also
voluntarily complied with the requirements for them to claim their corresponding monetary benefits in relation to the
cessation of their COE with Zytron.
As regards their employment with A.C. Sicat, we defer to the findings of the CA anent A.C. Sicat’s status as a legitimate
job contractor. Sicat was able to prove its status as a legitimate job contractor for having presented the following
evidence, to wit:
1.Certificate of Business Registration; 2.Certificate of Registration with BIR 3.Mayor’s Permit; 4.Certificate of
Membership with the SSS; 5.Certificate of Registration with the DOLE; 6.Company Profile; 7.Certifications issued
by its clients.
Furthermore, A.C. Sicat has substantial capital (5,926,155.76 as of Dec 2006). Too, its Agreement with Fonterra clearly
sets forth that A.C. Sicat shall be liable for the wages and salaries of its employees or workers, including benefits,
premiums, and protection due them, as well as remittance to the proper government entities of all withholding taxes,
SSS, and Medicare premiums, etc.
Furthermore, Fonterra’s issuance of Merchandising Guidelines, stock monitoring and inventory forms, and promo
mechanics to A.C. Sicat’s employees does not establish that Fonterra exercises control over A.C. Sicat. These were
imposed only to ensure the effectiveness of the promotion services as it would be risky for any company to completely
entrust the performance of the operations it has contracted out.
Having settled that A.C. Sicat is a legitimate job contractor, was the termination of L and E valid? YES.
It simply brought about by the expiration of their COEs. Foremost, they were fixed-term employees. Fixed-term
employment contracts are not limited, as they are under the present LC, to those by nature seasonal or for specific
projects with predetermined dates of completion; they also include those to which the parties by free choice have
assigned a specific date of termination. The determining factor of such contracts is not the duty of the employee but the
day certain agreed upon by the parties for the commencement and termination of the employment relationship.
In the case at bar, it is clear that they were employed by A.C. as project employees. In their COE, it is clearly stated that
“A.C. Sicat is temporarily employing L and E as TMRs under the following terms and conditions: The need for your service
being only for a specific project, your temporary employment will be for the duration only of said project of our client,
namely to promote FONTERRA BRANDS products which is expected to be finished on or before Nov. 06, 2006."
By accepting the conditions of the contract with A.C. Sicat, they were well aware of and even acceded to the condition
that their employment will end on said pre-determined date of termination. They cannot now argue that they were ID

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when their COEs were not renewed. This is so since the non-renewal of their contracts by A.C. Sicat is a
management prerogative, and failure of L and E to prove that such was done in bad faith militates against their
contention that they were ID.
SEASONAL
Universal Robina Sugar Milling Corp (URSUMCO), Cabati vs Acibo et al
URSUMCO is engaged in the sugar cane milling business; Cabati is URSUMCO’s Business Unit GM.
Acibo et al were employees were hired on various dates (1988-1996) and on different capacities i.e., drivers, crane
operators, bucket hookers, welders, mechanics, laboratory attendants and aides, steel workers, laborers, carpenters and
masons, among others. At the start of their engagements, they signed COEs for a period of 1 month or for a given
season. URSUMCO repeatedly hired them to perform the same duties and, for every engagement, required them to sign
new COEs for the same duration.
In 2002, Acibo et al filed before the LA complaints for regularization, entitlement to the benefits under the existing CBA,
and attorney’s fees.
LA dismissed the complaint and held that they were seasonal or project workers. The LA pointed out that the
complainants were required to perform, for a definite period, phases of URSUMCO’s several projects that were not at all
directly related to URSUMCO’s main operations. As the complainants were project employees, they could not be
regularized since their respective employments were coterminous with the phase of the work or special project to which
they were assigned and which employments end upon the completion of each project. It dismissed their money claims.
Of the 22 original complainants before the LA, 7 appealed to NLRC. NLRC reversed and declared them as regular
employees and granted their money claims under the CBA. It held that they performed activities necessary and desirable
in the usual trade of URSUMCO and were repeatedly hired for the same undertaking every season.
CA affirmed but deleted the money claims since the CBA only covered regular employees who work for the entire year
with no regard to the milling season. It held that they constituted a separate bargaining unit.
Issue: W/N Acibo et al are regular employees? YES. Regular seasonal employees.
Ruling:
Article 280 LC provides for 3 kinds of employment arrangements: regular, project/seasonal and casual. Regular
employment refers to that arrangement whereby the employee "has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer. By way of an exception, par 2, Article 280 also
considers regular a casual employment arrangement when the casual employee’s engagement has lasted for at least 1
year, regardless of the engagement’s continuity.
A project employment, on the other hand, contemplates on arrangement whereby "the employment has been fixed for a
specific project or undertaking whose completion or termination has been determined at the time of the engagement
of the employee. 2 requirements clearly need to be satisfied: (1) designation of a specific project or undertaking for which
the employee is hired; and (2) clear determination of the completion or termination of the project at the time of the
employee’s engagement. The services of the project employees are legally and automatically terminated upon the end or
completion of the project as the employee’s services are coterminous with the project.
Seasonal employment operates much in the same way as project employment, albeit it involves work or service that
is seasonal in nature or lasting for the duration of the season. Although the seasonal employment arrangement involves
work that is seasonal or periodic in nature, the employment itself is not automatically considered seasonal so as to
prevent the employee from attaining regular status. To exclude the asserted "seasonal" employee from those classified as
regular employees, the employer must show that: (1) the employee must be performing work or services that are seasonal
in nature; and (2) he had been employed for the duration of the season.
Hence, when the "seasonal" workers are continuously and repeatedly hired to perform the same tasks or activities
for several seasons or even after the cessation of the season, this length of time may likewise serve as badge of
regular employment. In fact, even though denominated as "seasonal workers," if these workers are called to work from
time to time and are only temporarily laid off during the off-season, the law does not consider them separated from

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the service during the off-season period. The law simply considers these seasonal workers on leave until re-employed.
Casual employment, the 3rd kind of employment arrangement, refers to any other employment arrangement that does not
fall under any of the first two categories, i.e., regular or project/seasonal.
Interestingly, LC does not mention another employment arrangement – contractual or fixed term employment– which, if
not for the fixed term, should fall under the category of regular employment in view of the nature of the employee’s
engagement, which is to perform an activity usually necessary or desirable in the employer’s business.Brent v. Zamora
upheld the validity of the fixed-term employment agreed upon by the employer, declaring that the restrictive clause in
Article 280 "should be construed to refer to the substantive evil that the Code itself singled out: agreements entered into
precisely to circumvent security of tenure. It should have no application to instances where the fixed period of employment
was agreed upon knowingly and voluntarily by the parties absent any circumstances vitiating the employee’s consent, or
where the facts satisfactorily show that the employer and the employee dealt with each other on more or less equal
terms”. Nevertheless, "where the circumstances evidently show that the employer imposed the period precisely to
preclude the employee from acquiring tenurial security, the law and this Court will not hesitate to strike down or disregard
the period as contrary to public policy, morals, etc."
The nature of the employment does not depend solely on the will or word of the employer or on the procedure for hiring
and the manner of designating the employee. Rather, the nature of the employment depends on the nature of the
activities to be performed by the employee, considering the nature of the employer’s business, the duration and scope
to be done, and, in some cases, even the length of time of the performance and its continued existence.
IN THE CASE AT BAR:
Acibo et al are neither project, seasonal nor fixed-term employees, but regular seasonal workers of URSUMCO. The
following factual considerations from the records support this conclusion:
First, they were made to perform various tasks that did not at all pertain to any specific phase of URSUMCO’s strict milling
operations that would ultimately cease upon completion of a particular phase in the milling of sugar; rather, they were
tasked to perform duties regularly and habitually needed in URSUMCO’s operations during the milling season.
Their duties as loader operators, hookers, crane operators and drivers were necessary to haul and transport the
sugarcane from the plantation to the mill; laboratory attendants, workers and laborers to mill the sugar; and welders,
carpenters and utility workers to ensure the smooth and continuous operation of the mill for the duration of the milling
season, as distinguished from the production of the sugarcane which involves the planting and raising of the sugarcane
until it ripens for milling. The production of sugarcane, it must be emphasized, requires a different set of workers who are
experienced in farm or agricultural work. Needless to say, they perform the activities that are necessary and desirable in
sugarcane production. As in the milling of sugarcane, the plantation workers perform their duties only during the planting
season.
Second, they were regularly and repeatedly hired to perform the same tasks year after year. This regular and
repeated hiring of the same workers for two separate seasons has put in place the system of regular seasonal
employment in the sugar industry and other industries with a similar nature of operations.
Under the system, the plantation workers or the mill employees do not work continuously for one whole year but only for
the duration of the growing of the sugarcane or the milling season. Their seasonal work, however, does not detract from
considering them in regular employment since seasonal workers who are called to work from time to time and are
temporarily laid off during the off-season are not separated from the service in said period, but are merely
considered on leave until re-employment. Be this as it may, regular seasonal employees should not be confused with
the regular employees of the sugar mill such as the administrative or office personnel who perform their tasks for the
entire year regardless of the season. Thus, they were not entitled to the benefits granted, under the CBA, to URSUMCO’S
regular employees.
Third, there is no evidence on record showing that after the completion of their tasks at URSUMCO, they sought and
obtained employment elsewhere.
Paz vs Northern Tobacco Redrying Co (NTRCI) Ang
NTRCI, a flue-curing and redrying of tobacco leaves business, employs approximately 100 employees with seasonal
workers “tasked to sort, process, store and transport tobacco leaves during the tobacco season of March to September.”
NTRCI hired Paz in 1974 as a seasonal sorter. It regularly re-hired her every tobacco season. She signed a

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seasonal job contract and a pro-forma application letter prepared by NTRCI in order to qualify for the next season.
In 2003, Paz was 63 years old when NTRCI informed her that she was considered retired under company policy. A year
later, NTRCI told her she would receive P12k as retirement pay.
Paz and 2 others filed a Complaint for ID. She amended her Complaint into a Complaint for payment of retirement
benefits, damages, and attorney’s fees as P12k seemed inadequate for her 29 years of service. The Complaint impleaded
Plant Manager Ang, as respondent. The Complaint was part of the consolidated Complaints of 17 NTRCI workers.
NTRCI countered that no CBA existed between NTRCI and its workers. Thus, it computed the retirement pay of its
seasonal workers based on Article 287 LC.
NTRCI raised the requirement of at least 6 months of service a year for that year to be considered in the retirement pay
computation. It claimed that Paz only worked for at least 6 months in 1995, 1999, and 2000 out of the 29 years she
rendered service. Thus, Paz’s retirement pay amounted to P12,487.50 after multiplying her P185 daily salary by 22½
working days in a month, for three years.
LA confirmed that her retirement pay was P12, 487.50. NLRC modified such that her retirement pay should be computed
pursuant to RA 7641 and that all the months she was engaged to work for respondent for the last 28 years should be
added and divided by 6 (for a fraction of 6 months is considered as one year) to get the number of years for her retirement
pay.
CA modified and awarded financial assistance of P60,356.25. It held that while applying the clear text of Article 287
resulted in the amount of P12,487.50 as retirement pay, “this amount was so meager that it could hardly support Paz, now
that she is weak and old, unable to find employment.” It discussed jurisprudence on financial assistance and deemed it
appropriate to apply the formula: 1/2-month pay multiplied by 29 years of service divided by two yielded P60,356.25 as
Paz’s retirement pay.
Paz filed this Petition praying that “the computation of Paz’s Retirement Pay as determined by the NLRC in its Decision be
reinstated.”
Issue: W/N there was illegal dismissal? What is the proper computation for retirement pay?
Ruling:
Aside from the 3 types of employees in Art. 280 LC, jurisprudence also recognizes regular seasonal employees.
TRCI engaged the services of Paz as a seasonal sorter and had been regularly rehired from 1974 until 2003 when she
was informed that she was being retired under company policy. The services Paz performed as a sorter were necessary
and indispensable to NTRCI’s business of flue-curing and redrying tobacco leaves. She was also regularly rehired as a
sorter during the tobacco seasons for 29 years since 1974. These considerations taken together allowed the conclusion
that Paz was a regular seasonal employee, entitled to security of tenure and may not be dismissed except for just cause.
Paz’s amendment of her Complaint to one for payment of retirement pay was not fatal to her cause of action for ID.
First, Paz never abandoned her argument that she had not reached the compulsory retirement age of 65 pursuant to
Article 287 when NTRCI made her retire. Second, NLRC found that NTRCI failed to prove a valid company retirement
policy, yet it required its workers to retire after they had reached the age of 60. CA also discussed that while NTRCI
produced guidelines on its retirement policy for seasonal employees, it never submitted a copy of its CBA and even
alleged in its Position Paper that none existed.
Paz was only 63 years old with two more years remaining before she would reach the compulsory retirement age of
65.“Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former.” Article
287 allows for optional retirement at the age of at least 60 years old. Consequently, if “the intent to retire is not clearly
established or if the retirement is involuntary, it is to be treated as a discharge.” Thus, she should be considered as
ID from May 18, 2003 until she reached the compulsory retirement age of 65 in 2005 and should be entitled to full
backwages for this period.

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Since the exact number of days Paz would have worked between May 18, 2003 until she would turn 65 in 2005 could not
be determined with specificity, this court thus awards full backwages in the amount of P22,200 computed by multiplying
P185.00 by 20 days, then by three months, then by two years.
Denial of due process? YES. Paz’s dismissal was illegal and there was no due process (requirements of notice and
hearing). Thus, she should be awarded 30k nominal damages.
Retirement pay?
NTRCI failed to present a copy of a CBA on the alleged retirement policy we apply Article 287 LC as amended by RA
7641. This provides for the proper computation of retirement benefits in the absence of a retirement plan or agreement:
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of 60 years or more, but not beyond 65 years which is hereby
declared the compulsory retirement age, who has served at least 5 years in the said establishment, may retire
and shall be entitled to retirement pay equivalent to at least 1/2 month salary for every year of service, a
fraction of at least 6 months being considered as one whole year.
Philippine Tobacco considered Articles 283 and 284 LC on separation pay, and these articles include the proviso “a
fraction of at least 6 months shall be considered 1 whole year.” While the present case involves retirement pay and not
separation pay, Article 287 LC on retirement pay similarly provides that “a fraction of at least 6 months being considered
as one whole year.”
Thus, this court’s reading of this proviso in the LC in Philippine Tobacco applies in this case. An employee must have
rendered at least six months in a year for said year to be considered in the computation. CA found “no positive proof
on the total number of months Paz actually rendered work”. On the other hand, both the CA and the CA established
from the records that she rendered at least 6 months of service for 1995, 1999, and 2000 only. Thus, P12,487.50 is
the correct award.
Financial assistance? YES. P12,487.50 is indeed too meager. We agree with the CA’s grant of P60,356.25 (1/2-month
pay multiplied by years in service and then divided by 2) as a measure of social justice in exceptional circumstances
(although her actual months of work were not proven) Paz rendered almost 3 decades of service to NTRCI and had no
record of any malfeasance. Her advanced age has also lessened her employment opportunities.
PROBATIONARY DEFINITION
Phil Federation of Credit Cooperatives Inc (PFCCI), Jayoma vs NLRC, Abril
In 1982, Abril was employed by PFCCI, a corporation engaged in organizing services to credit and cooperative entities, as
Junior Auditor/Field Examiner and thereafter held positions in different capacities, to wit: as office secretary in 1985
and as cashier-designate for 4 months ending in April 1988. Abril, shortly after resuming her position as office secretary,
subsequently went on leave until she gave birth to a baby girl.
Upon her return sometime, she discovered that a certain Santos had been permanently appointed to her former
position. She, nevertheless, accepted the position of Regional Field Officer as evidenced by a contract which stipulated
that her employment status shall be probationary for a period of 6 months. Said period having elapsed, she was
allowed to work until PFCCI presented to her another COE for a period of 1 year commencing on Jan 2, 1991 until Dec
31, 1991, after which period, her employment was terminated.
She filed a complaint for ID. LA dismissed but ordered PFCCI to reimburse her the amount of P2.5k which had been
deducted from her salary. NLRC reversed and ordered her reinstatement wit backwages.
Issue: W/N Abril was illegally dismissed? YES.
Ruling:
Article 281 LC allows the employer to secure the services of an employee on a probationary basis which allows him to
terminate the latter for just cause or upon failure to qualify in accordance with reasonable standards set forth by the

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employer at the time of his engagement. Probationary employees, notwithstanding their limited tenure, are also entitled
to security of tenure. Thus, except for just cause as provided by law, or under the employment contract, a probationary
employee cannot be terminated.
PFCCI alleges that Abril had allegedly abandoned her secretarial position for 8 months, she applied for the position of
Regional Field Officer, which appointment had been fixed for a specific project or undertaking the completion or
termination of which had been determined at the time of the engagement of Abril and therefore considered as a casual or
contractual employment under Article 280 LC.
The contention is misplaced; thus, it is imperative for the Court to elucidate on the kinds of employment recognized in this
jurisdiction. The pertinent provision of the Labor Code is Art. 280.
This provision of law comprehends 3 kinds of employees: (a) regular employees or those whose work is necessary or
desirable to the usual business of the employer; (b) project employees or those whose employment has been fixed for a
specific project or undertaking the completion or termination of which has been determined at the time of the engagement
of the employee or where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season; and (c) casual employees or those who are neither regular nor project employees. With regard to
contractual employees, Brent v. Zamora, laid down the guidelines before a contract of employment may be held as valid.
We are constrained to review the contract of employment entered into between Abril and PFCCI:
That the employer hires the employee on contractual basis to the position of Regional Field Officer of Region 4
under PFCCI/WOCCU/Aid Project No. 8175 and to do the function as stipulated in the job description assigned to
him (her): on probationary status effective Feb 17/90 for a period not to exceed 6 months from said effectivity,
subject to renewal of this contract should the employees performance be satisfactory.
While the initial statements of the contract show that Abril’s employment was for a fixed period, the succeeding
provisions thereof contradicted the same when it provided that she shall be under probationary status commencing on
Feb17, 1990 and ending 6 months thereafter. PFCCI manifested that her employment for a period of 1 year, from January
until December 1991, having been fixed for a specified period, could not have converted her employment status to one of
regular employment. Conversely, it likewise insisted that she was employed to perform work related to a project funded by
the World Council of Credit Unions (WOCCU) and hence, her status is that of a project employee. The Court is, thus,
confronted with a situation under which the terms of the contract are so ambiguous as to preclude a precise application
of the pertinent labor laws.
Since the COE was a contract of adhesion, doubts must be resolved strictly against the party who prepared it. Further, in
case of doubt, labor contracts must be construed in favor of labor pursuant to the Civil Code. Thus, Abril is a regular
employee entitled to security of tenure. Therefore, the dismissal, premised on the alleged expiration of the contract, is
illegal and entitles respondent to the reliefs prayed for.
Cebu Marine Beach Resort, Pelaez and Sasaki vs NLRC, Rodriguez, Villegas, Igot
Cebu Marine owned by Dualan, commenced its operations in April 1990 with the recruitment of its employees, including
Rodriguez, Villegas and Igot,
Inasmuch as the beach resort was intended to cater principally to Japanese tourists, Rodriguez et al had to undergo a
special training in Japanese customs, traditions, discipline as well as hotel and resort services. This special training
was supervised by Sasaki. During a seminar, Sasaki suddenly scolded them and hurled brooms, floor maps, iron trays,
fire hoses and other things at them. In protest, they staged a walk-out and gathered in front of the resort.
Immediately, Sasaki reacted by shouting at them to go home and never to report back to work. They filed a complaint
for ID and other monetary claims against Cebu Marine et al.
Cebu Marine, through its acting GM, Pelaez sent letters to Rodriguez et al requiring them to explain why they should not
be terminated from employment on the grounds of abandonment of work and failure to qualify with the standards for
probationary employees.
LA dismissed the complaint but and directed them to report back to work.

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NLRC reversed, declaring that they were ID and ordering their reinstatement with backwages or in lieu thereof, separation
pay. CA affirmed.
Issue: W/N Rodriguez et al were illegally dismissed? YES.
Ruling:
While probationary employees do not enjoy permanent status, they are entitled to security of tenure. Their employment
may only be terminated for just cause or when they fail to qualify as regular employees in accordance with reasonable
standards made known to them by their employer at the time of engagement, and after due process.
Here, Cebu Marine terminated their probationary employment on the grounds of abandonment and failure to qualify
for the positions for which they were employed. We agree with CA:
Mr. Sasaki made an utterance that they should go home and never come back to work for the company again.
Such utterance is tantamount to a dismissal. Considering further that Mr. Sasaki was in charge of the training
of them, his words carry authority and conviction. Even assuming for the sake of argument that Mr. Sasaki was
never vested with the power of dismissal, Cebu Marine ratified Mr. Sasakis acts. When it sent a strongly worded
memorandum to them asking them to explain why their services should not be terminated for failure to live up to
the companys expectations, it showed intention to terminate.
The subsequent issuances of the memos were merely an afterthought to escape the legal liability arising from the
illegal termination of the private respondents services.
Abandonment? NO. The fact that they never came back to work despite the issuance of the memoranda by Cebu
Marine does not support the allegation of abandonment.
Indeed, we find no indication that they have shown by some overt acts their intention to sever their employment. To
constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever the EER. Clearly, the
operative factor is still the employers ultimate act of putting an end to his employment.
Here, they did not report back for work because they were warned by Sasaki not to return. Also, the filing of a
complaint for ID is inconsistent with the charge of abandonment.
Failed to qualify for their positions? NO. At the time they were dismissed, they were still in a trial period or
probationary period. Being in the nature of a trial period, the essence of a probationary period of employment
fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said
period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is
qualified for permanent employment, the probationer seeks to prove to the employer that he has the qualifications to meet
the reasonable standards for permanent employment which obviously were made known to him. Far from allowing the
them to prove that they possessed the qualifications to meet the reasonable standards for their permanent employment,
Cebu Marine peremptorily dismissed them from the service.
CA’s award of full backwages and separation pay in effect unilaterally extended their 6-month probationary employment?
NO. Absent the grounds for termination of a probationary employee, he is entitled to continued employment even beyond
the probationary period. Lopez vs. Javier is quite explicit, thus:
probationary employees who are unjustly dismissed from work during the probationary period shall be entitled to
reinstatement and payment of full backwages and other benefits and privileges from the time they were dismissed
up to their actual reinstatement, conformably with Article 279 LC, as amended by Section 34 of RA 6715.
Verily, Rodriguez et al who were unjustly dismissed are actually entitled to reinstatement with full backwages, inclusive of
allowances, and to other benefits or their monetary equivalent computed from the time their compensation was withheld
from them up to the time of their actual reinstatement.
However, the circumstances obtaining in this case do not warrant the reinstatement due to strained relations. In lieu,

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separation pay equivalent to at least 1 month pay, or 1 month pay for every year of service, whichever is higher, in
addition to their full backwages, allowances and other benefits.
Enchanted Kingdom vs Verzo
Verzo: Section Head-Mechanical & Instrumentation Maintenance for theme park; 6 months probationary
Assessment: Poor. doesn’t give orders; mishandled the operation of the park's submersible pump causing sludge to
overflow up to the entrance of the parking area.; doesn’t perform job well (zorb pond lacked water); not punctual; slow in
making decisions; using internet while at work; 70/100
Enchanted formally informed Verzo that he did not qualify for regularization because his work performance for the past 5
months "did not meet the requirements of the position of Section Head for Mechanical and Instrumentation Maintenance”
Complaint: Illegal dismissal and damages

Defense: Informed of probationary status only after he was hired, believed he performed his job well
Issue: W/N he was ID? NO.
A probationary employee may be terminated for any of the following: (a) a just; or (b) an authorized cause; and (c) when
he fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer.
When dealing with a probationary employee, the employer is made to comply with two (2) requirements: first, the
employer must communicate the regularization standards to the probationary employee; and second, the employer must
make such communication at the time of the probationary employee's engagement. If the employer fails to comply with
either, the employee is deemed as a regular and not a probationary employee. An exception to the foregoing rule is when
the job is self-descriptive, as in the case of maids, cooks, drivers, or messengers.
When Verzo was first hired by Enchanted, he was placed on a probationary status. The letter clearly reflects not only
the agreement of both parties as to the probationary status of the employment and its duration, but also the fact that
Enchanted informed Verzo of the standards for his regularization.
Enchanted informed Verzo that he was being placed on probation. Aside from the probationary nature of his employment,
the agreement of the parties specifically showed: the duration of such status; the benefits to which he was entitled once
regularized; and most importantly, the standard with which he must comply in order to be regularized. To deserve
regularization, he must be able to conduct "mechanical and structural system assessments," as well as inspect and
evaluate the "conditions, operations and maintenance requirements of rides, facilities and buildings to ensure compliance
with applicable codes, regulations and standards." A detailed enumeration of his specific duties accompanied this letter of
employment to ensure that he was made aware and informed of his duties and responsibilities.
Enchanted had basis when it decided not to continue with the services of Verzo as SH-MIM.
1 Verzo himself admitted that the performance evaluation he received on February 3, 2010 was accompanied by the
respective reports of Schoefield, Montemayor and Velesrubio. these reports detailed the reasons why Verzo failed to
meet the standards set by Enchanted and compromised the safety of its patrons.
2 granting that Verzo was not informed of his specific duties and responsibilities, nonetheless, his dismissal was valid
because he failed to adhere to the dictates of common sense which required that he act in accordance with the necessary
work ethics and basic skills required by his position as SH-MIM and by his profession as licensed engineer.
3 while the CA considered the fact that Velesrubio advised Verzo to resign because he was not going to be regularized
even before his performance appraisal, the Court finds that such should not be taken as an indication of bad faith on the
part of Enchanted. For this Court, the same could only be Velesrubio's own opinion of Verzo, because he was the one
supervising his performance. Whether Enchanted had decided to discontinue Verzo's employment cannot, at that point,
be said to have been a foregone conclusion.
These observations were corroborated by Montemayor, who recounted that he was slow to make decisions, was often

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seen using company computers for personal interests, and was often late to report for work. With these, it is clear that
Velesrubio was correct in not recommending the regularization of Verzo because he evidently lacked the basic standard of
competence, prudence and due diligence.
On Punctuality, it is a reasonable standard imposed on every employee, whether in government or private sector. As a
matter of fact, habitual tardiness is a serious offense that may very well constitute gross or habitual neglect of duty, a just
cause to dismiss a regular employee.
Notice and Hearing not required:
Section 2 Rule I, Book VI of the Implementing Rules of the Labor Code:

Section 2. Security of tenure, (a) In cases of regular employment, the employer shall not terminate the services of
an employee except for just or authorized causes as provided by law, and subject to the requirements of due
process.
(b)The foregoing shall also apply in cases of probationary employment; Provided however, that in such cases,
termination of employment due to failure of the employee to qualify in accordance with the standards of the
employer made known to the former at the time of engagement may also be a ground for termination of
employment.
(d) In all cases of termination of employment, the following standards of due process shall be substantially
observed:
If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to
meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written
notice is served the employee, within a reasonable time from the effective date of termination.
By the very nature of a probationary employment, the employee knows from the very start that he will be under close
observation and his performance of his assigned duties and functions would be under continuous scrutiny by his
superiors. It is in apprising him of the standards against which his performance shall be continuously assessed
where due process regarding the second ground lies, and not in notice and hearing as in the case of the first ground.
Orient Express Placement Phils vs NLRC, POEA, Flores
Orient Express, in behalf of principal Nadrico Saudi Limited

Flores: Crane operator for 1 year, 3 mo-probationary
After 1 month and 5 days, repatriated
Complained to POEA
Orient and NADRICO: poor job performance and uncooperative work attitude
Issue: Was he validly dismissed?

Ruling:
NO. Orient failed to specify the reasonable standards by which private respondent's alleged poor performance
was evaluated, much less to prove that such standards were made known to him at the time of his recruitment in
Manila. Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment Contract
with NADRICO ever mentioned that he must first take and pass a Crane Operators' License Examination in Saudi Arabia
before he would be allowed to even touch a crane. Neither did he know that he would be assigned as floorman pending
release of the results of the examination or in the event that he failed; more importantly, that he would be subjected to a
performance evaluation by his superior one (1) month after his hiring to determine whether the company was amenable to
continuing with his employment. Hence, respondent Flores could not be faulted for precisely harboring the impression that
he was hired as crane operator for a definite period of one (1) year to commence upon his arrival at the work-site
and to terminate at the end of one (1) year.
No other condition was laid out except that he was to be on probation for three (3) months. Besides,
unsatisfactory performance is not one of the just causes for dismissal under the Labor Code
Uncooperative? NO. From the moment of his arrival at the work-site in Saudi Arabia he was immediately assigned
as floorman and not as crane operator, which was his job specification, on the flimsy excuse that a floorman was more
needed at the work-site. It was only because he was bold enough to resist and insist on his proper designation that his
foreign supervisors grudgingly relented. However in obvious retaliation to such perceived uncooperative work attitude, he

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was assigned to work at the graveyard shift, i.e., from twelve oclock midnight to twelve oclock noon. He was
not familiarized with nor given helpful instructions in the operation of relatively modern cranes. Instead, after subjecting
him to a supposed performance evaluation wherein his performance and work attitude were allegedly found wanting,
private respondent was again designated as floorman, albeit with the salary of a crane operator. A few days later he was
dismissed and repatriated to the Philippines. Obviously,this Court cannot accept as a justifiable ground for his termination
his alleged uncooperative work attitude.
DURATION; EXCEPTION
Cathay Pacific Aiwayd vs Marin, CA
Marin: Ticketing agent of Saudia Airlines

Applied as Reservation Officer; placed on probationary period of 6 months; Cathay reserves the right to terminate his
services during period If his performance is unsatisfactory
Received letter 1) accepting his resignation (upon suggestion of Cathay) and 2) terminating him due to unsatisfactory
performance
th
Complaint for ID, 13 mo, moral and exemplary damages
Defense: He was briefed on the standards of Cathay; he was always hatting noisily and not answering calls
Ruling: W/N Marin was illegally dismissed? NO
the records show that respondent was, in fact, briefed by Gozun and Montallana on the standards to qualify for
regularization after the probationary period.
Gozun briefed respondent on the rules and regulations of the Reservations Department of petitioner before his
employment, and was adequately informed of the basis of the termination, conformably with Rule 28, Department Order
No. 9, Series of 1997 of the Department of Labor and Employment. Respondent was further served a copy of Foster's
October 2, 1992 letter stating that he would not be given regular employment on account of his unsatisfactory
performance, as mandated by Article 281 of the Labor Code of the Philippines.
The power of the employer to terminate an employee on probation is thus subject to the following conditions: (1) it must
be exercised in accordance with the specific requirements of the contract; (2) the dissatisfaction on the part of the
employer must be real and in good faith, not prejudicial so as to violate the contract or the law; and (3) there must be no
unlawful discrimination in the dismissal. The burden of proving just or valid cause for dismissing an employee rests on the
employer.
His staff assessment;
-disrupts the operations of the department as he is always chatting noisily with others during office hours."
- average worker. But he cannot be depended/relied upon as he always leaves his work area and chats noisily with other
staff leaving calls unanswered.
Marin’s employment was not terminated during the period of his probationary employment, and that he was not extended
a regular employment by Cathay on account of his unsatisfactory work performance during the probationary period. This
was based on findings that his work performance during the six-month probationary period was unsatisfactory, based on
the staff assessment reports
Respondent cannot feign ignorance of House Rules of the Reservation Department. After the comptrollers' strike at the
airport was settled, respondent was briefed by Montallana on petitioner's rules and regulations, as well as those regarding
48
the work expected of him as a reservation officer, stressing the need for him to totally commit and be enthusiastic about
his work.
One of his responsibilities was to answer calls or queries from the public related to the itinerary of passengers and
bookings, and to respond to telexes from one port to another in the telesales area. He was prohibited from making or
receiving personal calls in the telesales area, which was also off-limits during coffee or lunch breaks. He was prohibited
from leaving his booth in the area except during coffee or lunch breaks.
While it is true that respondent was not furnished with the pink-colored set of regulations of petitioner Cathay and with
copies of the staff assessment reports, nevertheless, respondent was briefed by Montallana on their contents. When
Leviste inquired from respondent if he understood the rules and regulations, and if job specifications were clear to him, the

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latter responded in the affirmative. Respondent admitted having received from petitioner Cathay copies of documents to
be used to evaluate his performance. Petitioner thus complied with the statutory requirement.
Marin cannot validly claim that he was denied due process simply because he was not given a copy of the September 30,
1992 Staff Assessment Report of Gozun. The evidence on record shows that Leviste briefed him on the staff assessments
and Cathay’s decision not to regularize his employment upon the expiry of the probationary period, including the basis of
said decision. Hewas even allowed to confer with and appeal to Foster for him to be extended regular employment, but
Foster found no merit in his plea.
Canadian Opportunities Unlimited vs Dalangin
CAU: provides assistance and related services to applicants for permanent residence in Canada
-Dalangin: Immigration and Legal Manager; probation for 6 months
Tasks: review of clients’ application for immigration, ensure they are in accordance with Canadian and Ph laws
After he did not want to attend seminar beyond 2pm on Saturday, he was terminated thru Memorandum: unfit and
unqualified to continue
a) Obstinacy and utter disregard of company policies. Propensity to take prolonged and extended lunch
breaks, shows no interest in familiarizing oneself with the policies and objectives.
b) Lack of concern for the companys interest despite having just been employed in the company.
(Declined to attend company sponsored activities, seminars intended to familiarize company
employees with Management objectives and enhancement of company interest and objectives.)
c) Showed lack of enthusiasm toward work.

d) Showed lack of interest in fostering relationship with his co-employees.
Defense: He was informed that he was under probation; he lacked enthusiasm; indifferent to his co-employees
and clients; long breaks; leaving premises without informing supervisor
Issue: W/N he was validly dismissed? YES.
The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the employer
and the employee during the period. While the employer observes the fitness, propriety and efficiency of a probationer to
ascertain whether he is qualified for permanent employment, the latter seeks to prove to the former that he has the
qualifications to meet the reasonable standards for permanent employment.
We find substantial evidence indicating that the company was justified in terminating Dalangin, albeit he only stayed 4
weeks in the company.
Dalangin admitted that the proximate cause for his dismissal was his refusal to attend the companys Values Formation
Seminar scheduled on a Saturday. He refused to attend the seminar after he learned that it had no relation to his duties,
and that he had to leave at 2:00 p.m. because he wanted to be with his family in the province. When Abad insisted that he
attend the seminar to encourage his co-employees to attend, he stood pat on not attending, arguing that marked
differences exist between their positions and duties, and insinuating that he did not want to join the other employees. He
also questioned the scheduled 2:00 p.m. seminars on Saturdays as they were not supposed to be doing a company
activity beyond 2:00 p.m. He considers 2:00 p.m. as the close of working hours on Saturdays; thus, holding them beyond
2:00 p.m. would be in violation of the law.
The Values Formation Seminar incident is an eye-opener on the kind of person and employee Dalangin was. His refusal
to attend the seminar brings into focus and validates what was wrong with him. It highlights his lack of interest in
familiarizing himself with the companys objectives and policies. The incident also reveals Dalangins lack of interest in
establishing good working relationship with his co-employees, especially the rank and file; he did not want to join them
because of his view that the seminar was not relevant to his position and duties.
Dalangin exhibited negative working habits, particularly with respect to the one hour lunch break policy of the company
and the observance of the companys working hours.
The probationary term or period denotes its purpose but not its length. To our mind, four weeks was enough for the
company to assess Dalangins fitness for the job and he was found wanting. In separating Dalangin from the service
before the situation got worse, we find the company not liable for illegal dismissal.

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Procedural due process:
Section 2, Rule I, Book VI of the Labor Codes Implementing Rules and Regulations provides:
If the termination is brought about by the completion of a contract or phase thereof, or by failure of an
employee to meet the standards of the employer in the case of probationary employment, it shall be
sufficient that a written notice is served the employee within a reasonable time from the effective date
of termination.
The notice served on him did not give him a reasonable time, from the effective date of his separation, as required by the
rules. He was dismissed on the very day the notice was given to him. The companys non-compliance with the notice
requirement entitles Dalangin to nominal damages of P10,000.
CRITERIA FOR REGULARIZATION
Carvajal vs Luzon Development Bank, Ramirez
Carvajal: trainee-teller; 6 mos probationary

2 memos was given for her to explain why she should not be subjected to disciplinary action due to her chronic tardiness;
apologized and accepted the consequences; Suspended for 3 days without pay.
Lifted suspension but terminated her employment
Complaint for ID
Defense: She was a mere probationary employee; 1) chronic tardiness; 2) unauthorized absence; and 3) failure to
perform satisfactorily as a probationary employee. Rating of 2.17 out of 4 (4 is highest; 1 is the lowest)
Issue: Illegal dismissal? NO
Carvajal claims she has become a regular employee by virtue of Book VI, Rule 1, Section 6(d) of the Implementing Rules
of the Labor Code which states:
(d) In all cases of probationary employment, the employer shall make known to the employee the standards under
which he will qualify as a regular employee at the time of his engagement. Where no standards are made known
to the employee at that time, he shall be deemed a regular employee.
We disagree with Carvajal. At the time of her engagement and as mandated by law, she was informed in writing of the
standards necessary to qualify her as a regular employee. Petitioner knew, at the time of her engagement, that she must
comply with the standards set forth by respondent and perform satisfactorily in order to attain regular status. She was
apprised of her functions and duties as a trainee-teller. Respondent released to petitioner its evaluation20 of her
performance. Petitioner was found wanting.
It is evident that the primary cause of her dismissal was her “chronic tardiness.” At the very start of her employment,
petitioner already exhibited poor working habits. Even during her first month on the job, she already incurred 8 tardiness.
In a Memorandum, she was warned that her tardiness might affect her opportunity to become a permanent or regular
employee. And petitioner did not provide a satisfactory explanation for the cause of her tardiness.
Assuming that petitioner was not apprised of the standards concomitant to her job, it is but common sense that she must
abide by the work hours imposed by the bank.
Respondent also cited other infractions such as unauthorized leaves of absence, mistake in clearing of a check, and
underperformance.
Moreover, in the letter of appointment, respondents reserved the right to “immediately terminate this contract in the event
of a below satisfactory performance, serious disregard of company rules and policies and other reasons critical to its
interests.”
Due Process? YES. Carvajal had more than sufficient knowledge of the standards her job entails. Respondent had not
been remiss in reminding her, through memoranda, of the standards that should be observed in aspiring for regularization.
Petitioner was even notified in 2 memoranda regarding the bank’s displeasure over her chronic tardiness. Every
memorandum directed petitioner to explain in writing why she should not be subjected to disciplinary action. Each time,
petitioner acknowledged her fault and assured the bank that she would, in her daily schedules, make adjustments to make
amends. This certainly is compliance with due process.
UNIVAC Development Inc vs Soriano
Soriano: Legal assistant to the company; probationary basis
8 days before completion of 6-mo probationary period, terminated due to cost-cutting measures effective immediately; no
choice but to leave
Defense: He was informed of standards for regularization; a company meeting was held where heexpressed his intention
to leave the company because he wanted to review for the bar examinations. It was also in that meeting where he was

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informed of his unsatisfactory performance. Thus, when hedid not report for work UNIVAC assumed that he pushed
through with his plan to leave the company. He was not illegally dismissed, rather, he in fact abandoned his job by his
failure to report for work.
Issue: W/N he was illegally dismissed? YES.
UNIVAC failed to present adequate evidence to substantiate its claim that respondent was apprised of said standards;
merely relied on surmises and presumptions in concluding that respondent should have known the standards considering
his educational background as a law graduate.
Equally important is the requirement that in order to invoke "failure to meet the probationary standards" as a justification
for dismissal, the employer must show how these standards have been applied to the subject employee. In this case,
aside from its bare allegation, it was not shown that a performance evaluation was conducted to prove that his
performance was indeed unsatisfactory.
Power of the employer to terminate a probationary employee is subject to 3 limitations, namely: (1) it must be exercised in
accordance with the specific requirements of the contract; (2) the dissatisfaction on the part of the employer must be real
and in good faith, not feigned so as to circumvent the contract or the law; and (3) there must be no unlawful discrimination
in the dismissal. In this case, not only did petitioner fail to show that respondent was apprised of the standards for
regularization but it was likewise not shown how these standards had been applied in his case.
Because of UNIVAC’s omissions, he is deemed a regular employee since day one. His termination is without just and
valid ground. Neither was due process observed, making his termination illegal. He is, therefore, entitled to the twin relief
of reinstatement and backwages. However, considering the strained relations, separation pay should be awarded in lieu of
reinstatement.
Abbott Laboratories Ph, Terrible et al, vs Alcaraz

Abbott published in newspaper need for a Medical and Regulatory Affairs Manager. Alcaraz, a Regulatory Affairs and
Information Mgr at Aventis Pasteur, submitted her application
Alcaraz: offer was probationary basis for 6 months; accepted. She was briefed on her duties. HR Director, sent Alcaraz an
e-mail which contained an explanation of the procedure for evaluating the performance of probationary employees and
further indicated that Abbott had only one evaluation system for all of its employees. Alcaraz was also given copies of
Abbott’s Code of Conduct and Probationary Performance Standards and Evaluation (PPSE) and Performance Excellence
Orientation Modules (Performance Modules) which she had to apply in line with her task of evaluating the Hospira ALSU
staff.
Alcaraz would reprimand staff for their unprofessional behavior such as non-observance of the dress code, moonlighting,
and disrespect of Abbott officers. However, Alcaraz’s method of management was considered by Walsh to be "too strict."
She was told to lie low.
Alcaraz was called to a meeting with Walsh and Terrible where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager. Walsh and Terrible requested Alcaraz to tender her resignation,
else they be forced to terminate her services. She was given a letter terminating her services due to: (a) did not manage
her time effectively; (b) failed to gain the trust of her staff and to build an effective rapport with them; (c) failed to train her
staff effectively; and (d) was not able to obtain the knowledge and ability to make sound judgments on case processing
and article review which were necessary for the proper performance of her duties.
Complaint for ID and damages; claims to be regularized since she was not informed of the reasonable standards for
regularization upon her engagement.
Issue: W/N Alcaraz was illegally dismissed? NO
Abbott had indeed complied with the above-stated requirements. Abbott clearly conveyed to Alcaraz her duties and
responsibilities as Regulatory Affairs Manager prior to, during the time of her engagement, and the incipient stages of her
employment. Abbott caused the publication in a major broadsheet newspaper of its need for a Regulatory Affairs
Manager, indicating therein the job description for as well as the duties and responsibilities attendant to the aforesaid
position, to which Alcaraz responded. In the offer sheet, it was stated that Alcaraz was to be employed on a probationary
status; employment contract which specifically stated, inter alia, that she was to be placed on probation for a period of six
(6) months; Bernardo sent her copies of Abbott’s organizational structure and her job description through e-mail;

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Verily, basic knowledge and common sense dictate that the adequate performance of one’s duties is, by and of itself, an
inherent and implied standard for a probationary employee to be regularized; such is a regularization standard which need
not be literally spelled out or mapped into technical indicators in every case. In this regard, it must be observed that the
assessment of adequate duty performance is in the nature of a management prerogative which when reasonably
exercised – as Abbott did in this case – should be respected. This is especially true of a managerial employee like
Alcaraz who was tasked with the vital responsibility of handling the personnel and important matters of her department.
Termination:
A different procedure is applied when terminating a probationary employee; the usual two-notice rule does not
65
govern. Section 2, Rule I, Book VI of the IR of LC states that "if the termination is brought about by the failure of an
employee to meet the standards of the employer in case of probationary employment, it shall be sufficient that a written
notice is served the employee, within a reasonable time from the effective date of termination."
Alcaraz's dismissal was effected through a letter. Stated therein were the reasons for her termination. Undeniably, this
written notice sufficiently meets the criteria set forth above, thereby legitimizing the cause and manner of Alcaraz’s
dismissal as a probationary employee under the parameters set by the Labor Code.
Despite the existence of a sufficient ground to terminate Alcaraz’s employment and Abbott’s compliance with the Labor
Code termination procedure, it is readily apparent that Abbott breached its contractual obligation to Alcaraz when it
failed to abide by its own procedure in evaluating the performance of a probationary employee.
Abbott’s PPSE procedure mandates, that the job performance of a probationary employee should be formally reviewed
and discussed with the employee at least twice: first on the third month and second on the fifth month from the date of
employment. Abbott is also required to come up with a Performance Improvement Plan during the third month review to
bridge the gap between the employee’s performance and the standards set, if any. In addition, a signed copy of the PPSE
form should be submitted to Abbott’s HRD as the same would serve as basis for recommending the confirmation or
termination of the probationary employment.
In this case, Abbott failed to follow this procedure. While it is Abbott’s MP to promulgate its own company rules and even
subsequently amend them, this right equally demands that when it does create its own policies and thereafter notify its
employee of the same, it accords upon itself the obligation to faithfully implement them.
This violation renders the termination of Alcaraz’s employment procedurally infirm, warranting the payment of nominal
damages.
EXTENSION OF CONTRACT
Umali vs Hobbywing Solutions Inc
Hobbywing: online casino gaming establishment

Umali: Pitboss Supervisor; supervising online casino dealers as well as the operations of the entire gaming area or studio
of Hobbwing
Never signed COE, but regularly received salary every month
st nd
After 7 months, asked to sign 2 COEs. 1 was for 5 months and 2 was for 3 months. She signed both.
On the last day stipulated on the contract, she was terminated and told to wait whether she will be rehired/regularized.
Complaint: ID
Defense: Probationary basis from June to November; extended for 3 months = covered by 2 COEs signed at beginning of
employment; Umali was the one who declined to be retained after probationary period
Issue: W/N Umali was illegally dismissed? YES
Contradicting Hobbywing’s claim, Umali consistently reiterates that she was made to sign 2 contracts of probationary
employment, one covering the period from June 19, 2012 to November 18, 2012, and the other purportedly extending the
probationary employment from Nov 19, 2012 to Feb 18, 2013, only on January 19, 2013. She was able to note the actual
date when she signed the contracts, right beside her signature. And indeed, attached with her position paper, copies of
the 2 COEs signed by her clearly indicates the date "01.19.13" beside her signature. This substantiates her claim that the
documents were signed on the same day, that is, on Jan 19, 2013. Further, while the first contract was undated, the
Probation Extension Letter was dated January 10, 2013, which was way beyond the end of the supposed
probationary period of employment on Nov18, 2013, therefore validating her claim that she had already worked for more
than 6 months when she was asked to sign the 2 COEs.
This brings to the conclusion that the contracts were only made up to create a semblance of legality in the employment

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and severance of Umali. She worked from June 2012 to Feb 2013, thus she had become a regular employee.
Probation was validly extended? NO. Mariwasa vs Leogardo is inaaplicable since in that case, the extension was to give
the employee a chance to improve his performance and qualify for regularization. Here, (1) there was no evaluation upon
the expiration of the period of probationary employment; (2) the supposed extension was made after the lapse of the
original period agreed by the parties. Hobbywing only evaluated the performance of Umali for the period of June 2012 to
November 2013 on February 1, 2013, wherein she garnered a rating of 88.3%, which translates to a satisfactory
performance according to company standards. At the time of the evaluation, the original period of probationary
employment had already lapsed on November 18, 2012 and she was allowed to continuously render service without being
advised that she failed to qualify for regular employment. Clearly then, there is no reason to justify the extension
since she had a commendable rating and, apart from this, there is no more period to be extended since the
probationary period had already lapsed.
While in a few instances the Court recognized as valid the extension of the probationary period, still the general rule
remains that an employee who was suffered to work for more than the legal period of 6 months of probationary
employment or less shall, by operation of law, become a regular employee.
Since extension of the period is the exception, rather than the rule, the employer has the burden of proof to show that the
extension is warranted and not simply a stratagem to preclude the worker's attainment of regular status. Hobbywing failed.
Umali is entitled to the twin relief of reinstatement and backwages.
ABSORBED EMPLOYEES
Cebu Stevedoring Co Inc (CSCI) vs Regional Director/Minister of Labor, Gelig, Quijano
G & Q: employees of Cebu Customs Arrastre Service (CCAS); CCAS was abolished by AO 21-77 since its objectives had
been attained; G & Q were terminated and given separation pay.
All employees of CCAS were absorbed by CSCI with same positions as before
Eventually, G & Q were dismissed by CSCI without prior clearance, due to redundancy and financial losses
Complaint: Reinstatement with backwages before Regional Office
Defense: Employed as casuals; still on probation when they were terminated, thus no clearance was needed from Ministry
of Labor
Issue: W/N G & Q were validly dismissed? NO
They could not be considered probationary employees because they were already well-trained in their respective
functions. Gelig had been a clerk for CCAS for more than ten (10) years, while respondent Quijano had slightly less than
ten (10) years of service. They were, therefore, not novices in their jobs but experienced workers.
As regular employees, therefore, private respondents may not be dismissed and petitioner cannot terminate their services
except for a just or authorized cause provided by law and with scrupulous observance of due process requirements.
Authorized cause? the records fail to establish clearly and convincingly that the positions occupied by them are Identical
with those presently existing in petitioner's office. CSCI’s submission that it is suffering financial losses is untenable since
it appears that it absorbed and employed for almost 6 months, without any intimation of supposed financial distress, the
majority of the former employees of CCAS. It never advised G & Q of a company retrenchment program; the first time this
supposed program was mentioned was when it was trying to justify the dismissal of the private respondents before the
LA.
RULE ON PRIVATE SCHOOL TEACHERS
La Consolacion College et al vs NLRC, Dela Pena
Dela Pena: CAT Commandant and YCAP Coordinator for SY 1975-1976; YCAP Coordinator until he resigned in 1979.
Severed all ties with LCC in 1980. Prior to his resignation and despite demands by LCC for him to submit a syllabi in YDT
I, II, III, and CAT I containing course objectives, subject matter, content, concepts, skills, activities and evaluation not later
than 12 November 1979, respondent de la Pea failed to comply.

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He sought employment in other establishments. In 1991, he tried to apply in LCC again as CAT Commander and YDT
Instructor, the positions he held for 11 years before he resigned. He was appointed as Classroom teacher in Phy. Educ.
And Health. His written COE expressly provided that the employment was for 1 academic year. He accepted.
He was evaluated by Bayoguing and reminded to comply with the requirements and standard operating procedure of the
school, namely; timely submission of lesson plans, class records and other papers, attendance at regular monthly
meetings, and informing the school of absences. He ignored the reminder. He called an emergency meeting and shouted
invectives Bayoguing and threatened him with bodily harm.
The next SY, he wrote the Principal that he wanted to apply for another SY as faculty member. The Academic Team
informed him that he would no longer be hired due to his unsatisfactory performance.
Complaint: ID, moral, exemplary damages
Issue: W/N Dela Pena was illegally dismissed? NO
There is a written contract defining the period of employment of de la Pea. Clearly, the employment was not permanent
but for a specified duration of 1 school year. In resolving the issue of whether or not de la Pea was permanent
employee, it is the Manual of Regulations for Private Schools, not the Labor Code, which is applicable. For a private
school teacher to acquire permanent status in employment the following requisites must concur: (1) the teacher is a full-
time teacher; (2) the teacher must have rendered 3 consecutive years of service; and (3) such service must have been
satisfactory.
A school year begins in June and ends in March. The written contract of de la Pea stated that he shall be employed by the
LCC for the school year June 1992, up to March 1993, a fixed term of 10 months. It is also important to note that he was a
new hire having previously resigned from the school and was holding the position of classroom teacher for BED for
the first time. He never denied the fact that he failed to comply with the requirements of the school, hence, his
employment was not renewed. Neither did he attain permanent status. Clearly, respondent was not illegally dismissed.
Colegio del Santisimo Rosario (CSR), Mofada vs Rojo
Rojo: high school teacher on probationary basis for SY 1992-1993, 1993-1994, 1994-1995; In 1995 he was not renewed
Complaint: ID; alleged that he served 3 consecutive Sys, must be permanent employee already citing 1970 Manual of
Regulations for Private Schools
Defense: He knew his contract would expire, he was not dismissed; “three years” in paragraph 75 of the 1970 Manual
refer to “36 months,” not three school years. He only had 3 SYs of 10 months, thus only 30 months.
Issue: W/N Rojo is a probationary teacher?
Cases dealing with employment on probationary status of teaching personnel are not governed solely by the Labor Code
as the law is supplemented, with respect to the period of probation, by special rules found in the Manual of Regulations for
Private Schools (the Manual). With regard to the probationary period, Section 92 of the 1992 Manual provides:
Section 92. Probationary Period. – Subject in all instances to compliance with the Department and school
requirements, the probationary period for academic personnel shall not be more than three (3)
consecutive years of satisfactory service for those in the elementary and secondary levels, six (6)
consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive
trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester
basis.
CSR’s teachers who were on probationary employment were made to enter into a contract effective for one school year.
Thereafter, it may be renewed for another school year, and the probationary employment continues. At the end of the
second fixed period of probationary employment, the contract may again be renewed for the last time. Such employment
for fixed terms during the teachers’ probationary period is an accepted practice in the teaching profession.

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At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee,
primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the
employer. For the entire duration of this three-year period, the teacher remains under probation. However, this scheme “of
fixed-term contract is a system that operates during the probationary period and for this reason is subject to Article 281
LC:
The services of an employee who has been engaged on a probationary basis may be terminated for a just
cause or 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 his engagement. An employee who is allowed to work
after a probationary period shall be considered a regular employee.
Unless this reconciliation is made, the requirements of Article 281 on probationary status would be fully negated as the
school may freely choose not to renew contracts simply because their terms have expired.” This will have an unsettling
effect in the equilibrium vis-a-vis the relations between labor and management that the Constitution and Labor Code have
worked hard to establish.
That teachers on probationary employment also enjoy the protection afforded by Article 281 LC is supported by Section
93 of the 1992 Manual which provides:
Sec. 93. Regular or Permanent Status. - Those who have served the probationary period shall be made regular or
permanent. Full-time teachers who have satisfactorily completed their probationary period shall be
considered regular or permanent.
The above provision clearly provides that full-time teachers become regular or permanent employees once they
have satisfactorily completed the probationary period of three school years. The use of the term satisfactorily necessarily
connotes the requirement for schools to set reasonable standards to be followed by teachers on probationary
employment. As such, “no vested right to a permanent appointment shall accrue until the employee has completed the
prerequisite three-year period necessary for the acquisition of a permanent status. However, it must be emphasized
that mere rendition of service for 3 consecutive years does not automatically ripen into a permanent appointment. It is also
necessary that the employee be a full-time teacher, and that the services he rendered are satisfactory.” In Mercado the
court said:
When fixed-term employment is brought into play under the above probationary period rules, the situation may at
first blush look muddled as fixed-term employment is in itself a valid employment mode under Philippine law
and jurisprudence. The conflict, however, is more apparent than real when the respective nature of fixed-term
employment and of employment on probationary status are closely examined.
The fixed-term character of employment essentially refers to the period agreed upon between the employer and
the employee. In a sense, employment on probationary status also refers to a period because of the technical
meaning “probation” carries– a maximum period of six months, or in the academe, a period of 3 years for those
engaged in teaching jobs. Their similarity ends there, however, because of the overriding meaning that being
“on probation” connotes, i.e., a process of testing and observing the character or abilities of a person who is new
to a role or job.
Understood in the above sense, the essentially protective character of probationary status for management can
readily be appreciated. But this same protective character gives rise to the countervailing but equally protective
rule that the probationary period can only last for a specific maximum period and under reasonable, well-laid and
properly communicated standards. Otherwise stated, within the period of the probation, any employer
move based on the probationary standards and affecting the continuity of the employment must strictly conform to
the probationary rules.
If we pierce the veil, so to speak, of the parties’ so-called fixed-term employment contracts, what
undeniably comes out at the core is a fixed-term contract conveniently used by the school to define and
regulate its relations with its teachers during their probationary period.
In the same case, this Court has definitively pronounced that “in a situation where the probationary status overlaps with a
fixed-term contract not specifically used for the fixed term it offers, Article 281 should assume primacy and the fixed-
period character of the contract must give way.”
An example given of a fixed-term contract specifically used for the fixed term it offers is a replacement teacher or a
reliever contracted for a period of one year to temporarily take the place of a permanent teacher who is on leave. The
expiration of the reliever’s fixed-term contract does not have probationary status implications as he or she was never
employed on probationary basis. There exists an intent to end his or her employment with the school upon expiration of
this term.

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However, for teachers on probationary employment, in which case a fixed term contract is not specifically used for the
fixed term it offers, it is incumbent upon the school to have not only set reasonable standards to be followed by
said teachers in determining qualification for regular employment, the same must have also been communicated
to the teachers at the start of the probationary period, or at the very least, at the start of the period when they
were to be applied. These terms, in addition to those expressly provided by the Labor Code, would serve as the just
cause for the termination of the probationary contract. The specific details of this finding of just cause must be
communicated to the affected teachers as a matter of due process.Corollarily, should the teachers not have been
apprised of such reasonable standards at the time specified above, they shall be deemed regular employees.
In this case, glaringly absent from CSR’s evidence are the reasonable standards that Rojo was expected to meet that
could have served as proper guidelines for purposes of evaluating his performance. Neither was it mentioned that the
same were ever conveyed to him. Even assuming that he failed to meet the standards set forth by CSR and made known
to the former at the time he was engaged as a teacher on probationary status, still, the termination was flawed for failure
to give the required notice to him.
It should be pointed out that absent any showing of unsatisfactory performance on the part of Rojo, it can be presumed
that his performance was satisfactory, especially since even while he was still more than a year into his probationary
employment, he was already designated Prefect of Discipline. As such, he was able to uncover the existence of a drug
syndicate within the school and lessen the incidence of drug use therein. Yet despite his substantial contribution to the
school, CSR chose to disregard the same and instead terminated his services.
SUSPENSION OF BUSINESS OPERATION- WHEN NOT DEEMED TERMINATED
Valdez vs NLRC, Nelbusco Inc
Valdez: bus driver on commission basis; his bus aircon broke down; Nelbusco told him to wait until it was repaired, but no
other bus was given to him. Months elapsed and he was not called to report for work; He found out that the bus was
already given to a newly-hired driver.
Complaint: ID, money claims, reimbursement of bond and tire deposit
Defense: Valdez was the one who did not report for work; voluntarily resigned to supervise construction of his house
Issue: W/N Valdez was illegally dismissed? YES.

Under Article 286 LC, the bona fide suspension of the operation of a business or undertaking for a period not
exceeding 6 months shall not terminate employment. Beyond six months, then the employment of the employee shall
be deemed terminated. Applying said rule by analogy, if the employee was forced to remain without work or
assignment for a period exceeding 6 months, then he is in effect constructively dismissed.
The reason for the stoppage of operation of the bus assigned to Valdez was the breakdown of the airconditioning unit,
which is a valid reason for the suspension of its operation. However, such suspension should likewise last only for a
reasonable period of time. The defect in the airconditioning unit could have been easily remedied by Nelbusco. The
period of 6 months was more than enough.
Although, it is true that the present complaint was filed by Valdez before the end of the 6 months period, the filing of the
same is nonetheless in order, considering the ff:
Nelbusco tried to force Valdez to sign an undated company-prepared resignation letter and a blank undated affidavit of
quitclaim and release which he refused to sign. Furthermore, the bus which he used to drive was already was being
driven by another person, without Valdez having been priorly offered the same alternative arrangement.
Finally, Nelbusco admitted more than 1 year and 6 months from Valdez’s dismissal, that the bus was still awaiting
repair. Hence, even after the lapse of 6 months from the date the bus driven by Valdez broke down, Nelbusco was still not
in a position to provide any work assignment to Valdez.
It being clearly established that he was constructively dismissed, back wages and separation pay in lieu of reinstatement,
plus the refund of his cash bond and tire deposit, is definitely in order.
SKM Art Craft Corp vs Bauca et al
SKM: handicraft business
Bauca et al: employees of SKM
Fire occurred at the inspection and packing area of SKM. SKM informed Bauca et al that it will suspend operations for 6

Page 54 of 87
months
8 days after receiving the notice, Bauca et al filed for ID alleging discrimination in choosing the workers to be laid off, and
that most were members of a newly-organized union
Issue: W/N Bauca et al were illegally dismissed? YES
While the suspension of SKM’s operation is valid, Bauca et al were illegally dismissed since they were not recalled after
six months, after the bona fide suspension of SKM’s operations. The fire was corroborated by pictures and the fire
investigation report.
Under Article 286 of the Labor Code, the bona fide suspension of the operations of a business or undertaking for a period
not exceeding six months shall not terminate employment. Article 286 provides,
ART. 286. The bona fide suspension of the operations of a business or undertaking for a period not exceeding 6
months, or the fulfillment by the employee of a military or civic duty shall not terminate employment.
In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if
he indicates his desire to resume his work not later than 1 month from the resumption of operations of his
employer or from his relief from the military or civic duty.
The complaint for ID was premature since it was filed only 8 days after SKM announced that it will suspend its operations
for 6 months. Nonetheless, they were already illegally dismissed since SKM failed to recall them after six months.
Lopez vs Irvine Construction Corp, Santos
Irvine: Construction firm

Lopez: laborer, but later guard at warehouse; Terminated, was told “Ikaw ay lay-off muna”.
Complaint: ID, separation benefits
Defense: Temporarily laid off after Cavite project finished; allegedly asked him to return to work within 6 months
Issue: W/N Lopez was illegally dismissed?
First, he is a regular employee and not a project employee because no substantial evidence had been presented by Irvine
to show that Lopez had been assigned to carry out a "specific project or undertaking," with its duration and scope
specified at the time of engagement. He had also been employed more than 10 years.
Lopez, who, was a regular employee of Irvine, was not merely temporarily laid off from work but was terminated from
his employment without any valid cause. The supposed lay-off of Lopez was hardly justified considering the absence
of any causal relation between the cessation of Irvine's project in Cavite with the suspension of Lopez's work. To repeat,
Lopez was not a project employee. Hence, the continuation of his engagement with Irvine, either in Cavite, or in any of its
business locations, should not have been affected by the culmination of the Cavite project alone.
Irvine should have established the bona fide suspension of its business operations or undertaking that would have
resulted in the temporary lay-off of its employees for a period not exceeding 6 months in accordance with Article 286 of
the Labor Code. In this case, Irvine failed to prove compliance with Article 286 LC. In invoking Article 286 LC, the
paramount consideration should be the dire exigency of the business of the employer that compels it to put some of its
employees temporarily out of work. This means that the employer should be able to prove that it is faced with a clear and
compelling economic reason which reasonably forces it to temporarily shut down its business operations or a
particular undertaking, incidentally resulting to the temporary lay-off of its employees.
No evidence was submitted by Irvine to show any dire exigency which rendered it incapable of assigning Lopez to any of
its projects. Further, Irvine did not proffer any sufficient justification for singling out Lopez for lay-off among its other 300
employees. Thus, Lopez had been constructively dismissed; and since the same was effected without any valid cause
and due process, Lopez's dismissal was illegal.
Exocet Security and Allied Services Corp, Marcelo vs Serrano
Exocet: provides security personnel to its various clients/principals
Serrano: 1994, assigned by Excited to JG Summit as “close-in” security personnel for one of JG’s corporate officers, Go;
After 8 years, he was reassigned as close in security for Gokongwei and his wife.
2006, Serrano was relieved by JG from his duties. More than 6 months after reporting back to Exocet, he was without
reassignment.
Complaint: ID
Defense: Did not dismiss; no longer reported for duty for JG Summit and demanding detail to another client. Since Exocet

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did not have clients in need of VIP security, he was temporarily assigned to general security service which Serrano
declined and refused to report for duty.
Issue: W/N Serrano was constructively dismissed? NO.
The crux of the controversy lies on the consequence of the lapse of the 6-month period, during which he was placed on a
"floating status" and Exocet could not assign him to a position he wants.
While there is no specific provision in the Labor Code which governs the "floating status" or temporary "off-detail" of
security guards employed by private security agencies, this situation was considered by this Court in several cases as a
form of temporary retrenchment or lay-off. It takes place when the security agency’s clients decide not to renew their
contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the
number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client
may request the agency for the replacement of the guards assigned to it, even for want of cause, such that the replaced
security guard may be placed on temporary "off-detail" if there are no available posts under the agency’s existing
contracts.
As the circumstance is generally outside the control of the security agency, when a security guard is placed on a "floating
status," he or she does not receive any salary or financial benefit provided by law. Due to the grim economic
consequences to the employee, the employer should bear the burden of proving that there are no posts available to which
the employee temporarily out of work can be assigned.
It must be emphasized, however, that although placing a security guard on "floating status" or a temporary "off-detail" is
considered a temporary retrenchment measure, there is similarly no provision in the LC which treats of a temporary
retrenchment or lay-off. Neither is there any provision which provides for its requisites or its duration. Nevertheless, since
an employee cannot be laid-off indefinitely, the Court has applied Article 292 LC by analogy to set the specific period of
temporary lay-off to a maximum of 6 months.
The placement of the employee on a floating status should not last for more than six months. After 6months, the
employee should be recalled for work, or for a new assignment; otherwise, he is deemed terminated.
Thus, DOLE issued DO 14-01, entitled "Guidelines Governing the Employment and Working Conditions of Security
Guards and Similar Personnel in the Private Security Industry," Section 6.5, in relation to Sec. 9.3, of which states that the
lack of service assignment for a continuous period of 6 months is an authorized cause for the termination of the employee,
who is then entitled to a separation pay equivalent to half month pay for every year of service.
Thus, to validly terminate a security guard for lack of service assignment for a continuous period of 6 months under Secs.
6.5 and 9.3 of DO 14-01, the security agency must comply with the provisions of Article 289 LC, which mandates that a
written notice should be served on the employee on temporary off-detail or floating status andto the DOLE 1 month
before the intended date of termination.
In this case, there is no question that Serrano, was placed on floating status after his relief from his post as a VIP security.
Yet, there is no showing that Exocet acted in bad faith when it placed him on such floating status. What is more,
the present case is not a situation where Exocet did not recall Serrano to work within the 6-month period. Exocet
did make an offer to Serrano to go back to work. It is just that the assignment—although it does not involve a demotion
in rank or diminution in salary, pay, benefits or privileges—was not the security detail desired by Serrano.
Clearly, Serrano’s lack of assignment for more than 6 months cannot be attributed to Exocet. On the contrary, one month
after Serrano was relieved as VIP, Exocet had already offered him a position in the general security service because there
were no available clients requiring positions for VIP security. Notably, even though the new assignment does not involve a
demotion in rank or diminution in salary, pay, or benefits, Serrano declined the position because it was not the post that
suited his preference.
TERMINATION OF EMPLOYMENT
SECURITY OF TENURE RATIONALE
Distribution & Control Products Inc, Tiamsic, Santos

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DCPI: selling and distributing electrical products and equipment
Santos: company driver
Complaint: Constructive illegal dismissal and separation pay; placed under preventive suspension for 30 days because
suspected of taking circuit breakers and electrical products; HR did not explain why he got suspended; After 30
suspension, he was not allowed to return to work
Defense: Inventory disclosed that electrical materials were missing and Santos and the warehouseman were the only
persons who had access to the warehouse; Santos was suspended, after suspension, did not return to work
Issue: W/N Santos was illegally dismissed? YES
9
Our Constitution, statutes and jurisprudence uniformly guarantee to every employee or worker tenurial security. What this
means is that an employer shall not dismiss an employee except for a just or authorized cause and only after due process
is observed. An employee's right not to be dismissed without just or authorized cause as provided by law, is covered by
his right to substantial due process. Compliance with procedure provided in the Labor Code, on the other hand,
constitutes the procedural due process right of an employee.
In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid cause;
failure to do so would necessarily mean that the dismissal was illegal.
In order for the employer to properly invoke Loss of Trust and Confidence as a just cause, the employer must satisfy two
conditions.
15
First, the employer must show that the employee concerned holds a position of trust and confidence. Jurisprudence
16
provides for two classes of positions of trust. The first class consists of managerial employees, entrusted with
17
confidential and delicate matters and from whom greater fidelity to duty is correspondingly expected. The second class
includes "cashiers, auditors, property custodians, or those who, in the normal and routine exercise of their functions,
18
regularly handle significant amounts of [the employer's] money or property."
19
Second, the employer must establish the existence of an act justifying the loss of trust and confidence. To be a valid
cause for dismissal, the act that betrays the employer's trust must be real, i.e., founded on clearly established facts, and
the employee's breach of the trust must be willful, i.e., it was done intentionally, knowingly and purposely, without
20
justifiable excuse. Moreover, with respect to rank-and-file personnel, loss of trust and confidence, as ground for valid
dismissal, requires proof of involvement in the alleged events, and that mere uncorroborated assertions and
accusations by the employer will not be sufficient.
Santos may indeed be considered as one who occupies a position of trust and confidence (entrusted with the handling of
a significant amount of DCPI’s products). However, DCPI failed to present substantial evidence to support their
allegations that he had, in any way, participated in the theft of the company's stolen items and that after his
preventive suspension he no longer reported for work.
As to whether or not he was afforded procedural due process, the settled rule is that in termination proceedings of
29
employees, procedural due process consists of the twin requirements of notice and hearing. The only notice given to
Santos was the notice of his 30-day preventive suspension and nothing therein indicated that he was required nor
was given the opportunity to explain his side, considering that he was being implicated in the theft.
As to the required notice of termination, petitioners allege that they did not terminate him from his employment and that it
was he who actually decided to abandon his job. However, DCPI failed to substantiate their allegation.
COVERAGE
Labajo, San Andres HS, Alejandro et al
Alejandro and 5 others: classroom teachers; some regular day class, other special evening class.
Complaint: got letters of termination; illegal dismissal and non payment of benefits and reinstatement
Defense: they were made aware that the school cannot give them all that is due them under the law, they are estopped;
mere probationary terminated upon expiration of contracts; Alejandro and Amar allegedly committed estafa against he
students
Issue: W/N Alejandro et al were illegally dismissed? NO
Considering first the nature of their employment, we note that the applicability in this case of paragraph 75 of the Manual
of Regulations for Private Schools is not disputed by the parties. The provision reads:
(75) Full-time teachers who have rendered three years of satisfactory service shall be considered
permanent.
The 3-year period of service mentioned in paragraph 75 above is of course the maximum period or upper limit, so to
speak, of probationary employment allowed in the case of private school teachers. This necessarily implies that a regular
or permanent employment status may, under certain conditions, be attained in less than 3 years.

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none of the 6 private respondents had been able to accumulate at least three (3) years of service with the San Andres
High School at the time of their separation therefrom.
As to Amar and Alejandro, aside from the assertions, the record is bereft of evidence of Mr. Amar's supposed extensive
prior teaching experience. Second, it is the length of time Mr. Amar has been teaching at petitioner High School that is
material in determining whether or not he in fact qualified as a regular employee thereof Third, at the time of receipt by
him of Fr. Labajo's letter, Amar had been employed by the San Andres High School for less than 3 years. They have not
shown, and the record is bare of evidence to show that SA High School had otherwise extended to Mr. Amar a regular and
permanent appointment prior to Fr. Labajo's letter.
The contention of Alejandro is likewise not persuasive. Alejandro lacked the requisite number of years of service to qualify
as a regular employee of SASH: Ms. Alejandro had taught there for at most only 2 years. Furthermore, mere appointment
as "Night Principal" is not, by itself sufficient proof that her employment status had in fact been upgraded from
probationary to regular.
The COE’s stipulations show that such contracts each had an effective term of 10 months, i.e., from June until either
March or April. New contracts for another period of 1- months were negotiated between SASH and private respondents at
the beginning of each school year. It does not appear from the record that renewal was obligatory upon either party.
12
We note that they were informed in writing by Labajo that their services at the SASH would be "terminated". Their
employment was on a contractual basis and for a stipulated period of time: both parties knew beforehand that the
employment relation would come to an end on 31 March 1985. Thus, Fr. Labajo's letter cannot properly be regarded
as one of termination. Such letter was either a formal reminder to them that their respective COEs were due to expire,
or advance notice that such contracts would no longer be renewed for school year 1985-1986, or both.
Just cause? As probationary and contractual employees, they enjoyed security of tenure, but only to a limited extent
— i.e., they remained secure in their employment during the period of time their respective contracts of employment
remained in effect. That temporary security of tenure, however, ended the moment their employment contracts expired
and SASH declined to renew the same. Consequently, their separation cannot be said to have been without justifiable
cause, much less illegal.
Skillworld Management and Marketing Corp vs NLRC, Manuel
Skillworld: Recruitment agency

Manuel: deployed to Jeddah as driver; signed 2-yr COE with employer Shary Limousin; 2 months later, repatriated.
Skillworld promised to deploy him to other projects. Was not deployed for more than 1 yr
Complaint: ID; While in Jeddah, caught by police without valid license (Shary gave him Certification of Employment and
was told it was his valid driver’s license); Brought the matter to Shary, repatriated.
Defense: Probationary employee; dismissed due to disobedience, absenteeism, refusal to work and banding together to
engage in concerted activities against the employer
Issue: W/N Manuel was illegally dismissed? YES.
While it may be true that Manuel was a probationary employee at the time of his dismissal he may not be dismissed
without cause. as a probationary employee, private respondent had a limited tenure. During his tenure of employment
therefore, or before his contract expires, he cannot be removed except for cause.
The alleged causes for which he was dismissed, viz: disobedience, absenteeism, refusal to work, and banding together
to engage in a concerted activity against their employer and inciting other employees towards the commission thereof
were not established.
The evidence is clear that the purported temporary licenses to drive issued to complainant and his co-drivers by Shary
turned out to be mere certifications to the effect that they are Filipino citizens who are holders of given passport numbers
and that they were sent to work with the Shary Limousine Branch in Jeddah. It is precisely for this reason that after being
accosted twice at checkpoints by Saudi police, who informed complainant and his co-drivers that the alleged temporary
licenses were no (sic) good and not valid, they brought the matter first to their Lebanese superior and then to the
Philippine Embassy.

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Inter-Orient Maritime Enterprises, Sea Horse Ship Inc, Trenda World Shipping Inc vs NLRC, Tayong
Inter-orient: agency
Trena and Sea Horse: Principal
Tayong: Licensed Master Marinerl employed as Master of vessel M/V Oceanic Mindoro; 1-yr contract; While in port of HK,
received weather report of storm, precautionary measures were taken since turbo-charger was leaking and vessel was 14
yrs old. Tayong followed-up the requisition by the former captain of the Oceanic Mindoro for supplies of oxygen and
acetylene, necessary for the welding-repair of the turbo-charger and the economizer. The delivery was delayed. Tayong
called Sea Horse and said that the vessel could not said to South Africa, and delivery of goods would be delayed.
Mr. Clark, the technical director of Sea Horse received a call from Captain Tayong informing him that the vessel cannot
sail without the oxygen and acetylene for safety reasons due to the problems with the turbo charger and economizer. Mr.
Clark responded that by shutting off the water to the turbo chargers and using the auxiliary boiler, there should be no
further problems. According to Mr. Clark, Captain Tayong agreed with him that the vessel could sail as scheduled on 0100
hours on 1 August 1989 for South Africa
According to Captain Tayong, however, he communicated to Sea Horse his reservations regarding proceeding to South
11
Africa without the requested supplies, and was advised by Sea Horse to wait for the supplies at 0800 hrs. of 1 August
12
1989, which Sea Horse had arranged to be delivered on board the Oceanic Mindoro. At 0800 hours on 1 August 1989,
the requisitioned supplies were delivered and Captain Tayong immediately sailed for Richard Bay.
When the vessel arrived at the port of Richard Bay, South Africa on 16 August 1989, Captain Tayong was instructed to
turn-over his post to the new captain. He was thereafter repatriated, after serving or a little more than two weeks.
Complaint: ID in POEA
Defense: Tayong refused to sail to South Africa to their damage; As a direct result of Captain Tayong's delay, their vessel
was placed "off-hire" by the charterers for 12 hours. This meant that the charterers refused to pay the charter hire or
compensation corresponding to 12 hours, amounting to US$15,500.00, due to time lost in the voyage. They stated that
they had dismissed private respondent for loss of trust and confidence.
Issue: W/N Tayong was ID? YES.
Confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably
established in an appropriate investigation. Such employees, too, are entitled to security of tenure, fair standards of
employment and the protection of labor laws.
The captain of a vessel is a confidential and managerial employee. A master or captain, for purposes of maritime
commerce, is one who has command of a vessel. Captain Tayong was denied any opportunity to defend himself.
Seahorse curtly dismissed him from his command and summarily ordered his repatriation to the Philippines without
informing him of the charge or charges levelled against him. In fact, it was only on 26 October 1989 that Captain Tayong
received a telegram from Inter-Orient requiring him to explain why he delayed sailing to South Africa.
Petitioners rely on self-serving affidavits of their own officers and employees predictably tending to support their allegation
that Captain Tayong had performed acts inimical to their interests for which, supposedly, he was discharged. The official
report of Mr. Clark, Seahorse’ representative, shows that Tayong did not arbitrarily and maliciously delay the voyage
to South Africa. There had been a disruption in the normal functioning of the vessel's turbo-charger and economizer and
that had prevented the full or regular operation of the vessel.
More importantly, a ship's captain must be accorded a reasonable measure of discretionary authority to decide what
the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage. The requirements of
safe navigation compel us to reject any suggestion that the judgment and discretion of the captain of a vessel may be
confined within a straitjacket, even in this age of electronic communications. Indeed, if the ship captain is convinced, as a
reasonably prudent and competent mariner acting in good faith that the shipowner's or ship agent's instructions will result,
in the very specific circumstances facing him, in imposing unacceptable risks of loss or serious danger to ship or crew, he
cannot casually seek absolution from his responsibility, if a marine casualty occurs, in such instructions.
The critical question, therefore, is whether or not Captain Tayong had reasonable grounds to believe that the safety of the
vessel and the crew under his command or the possibility of substantial delay at sea required him to wait for the delivery
of the supplies needed for the repair of the turbo-charger and the economizer before embarking on the long voyage from
Singapore to South Africa? YES. the Oceanic Mindoro had stopped in mid-ocean for 6 hours and 45 minutes on its way to
Singapore because of its leaking economizer. Equally relevant is the telex sent by Captain Tayong to Sea Horse
after Oceanic Mindoro had left Singapore and was en route to South Africa urgently requesting for the supply of Oxy/Acet
to avoid danger at sea.
MANAGEMENT PREROGATIVE
Negros Slashers Inc, Alvarez and Tan vs Teng
Teng: professional basketball player; signed 3 yr contract with Laguna Lakers but was traded to Negros Slashers for the
unexpired portion of his contract; Teng executed with Negros the Players COE.
In Game number 4 of MBA Championship, Teng did not perform well. Coach pulled him out of the game. Teng sat

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on the bench and untied his shoelaces and donned his practice jersey. The next game, he called in sick and did not play.
Tan, Finance Head of Negros, wrote to Teng requiring him to explain why no disciplinary action should be taken against
him for his precipitated absence during the crucial Game 5. He was further informed that a formal investigation would be
conducted. The investigation proceeded, attended by Tengs representatives, Atty. Yulo and Atty Aspiras. A subsequent
meeting was also conducted attended by the management, coaching staff and players of the Negros Slashers team,
wherein the team members and coaching staff unanimously expressed their sentiments against Teng and their
opposition against the possibility of Teng joining back the team.
The management of Negros Slashers came up with a decision, and wrote Teng informing him of his termination from the
team.
Complaint: ID
Issue: W/N Teng was illegally dismissed? YES. Dismissal was too harsh.
Petitioners rely heavily on the alleged effects of Tengs actions on the rest of the team. However, such reaction from team
members is expected after losing a game, especially a championship game. It is also not unlikely that the team
members looked for someone to blame after they lost the championship games and that Teng happened to be the
closest target of the teams frustration.
As an employee of the Negros Slashers, Teng was expected to report for work regularly. Missing a team game is indeed
a punishable offense. Untying of shoelaces when the game is not yet finished is also irresponsible and
unprofessional. However, such isolated foolishness of an employee does not justify the extreme penalty of dismissal
from service. Negros could have opted to impose a fine or suspension on Teng for his unacceptable conduct.
Infractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. In
the case at bar, the penalty handed out was the ultimate penalty of dismissal. There was no warning or admonition for
Teng’s violation of team rules, only outright termination of his services for an act which could have been punished
appropriately with a severe reprimand or suspension.
Dongon vs Rapid Movers and Forwarders Co Inc, Jao
Rapid: hauling and trucking business

Dongon: truck helper leadman; Tanduay Otis Warehouse, facilitates the loading and unloading of Rapid’s trucks. His truck
driver did not have ID, caught by security guard. Lent his ID to truck driver and were able to release Tanduay’s goods,
security guard reported to the management of Tanduay. After administrative investigation, dismissed by Rapid.
Complaint: ID
Issue: WN his dismissal was illegal? YES.

He is not guilty of willful disobedience; hence, his dismissal was illegal. Willful disobedience to the lawful orders of an
employer is one of the valid grounds to terminate an employee under Article 296 LC: For willful disobedience to be a
ground, it is required that: (a) the conduct of the employee must be willful or intentional; and (b) the order the employee
violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties that he had
been engaged to discharge.
Willfulness must be attended by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with
proper subordination. In any case, the conduct of the employee that is a valid ground for dismissal under the Labor Code
constitutes harmful behavior against the business interest or person of his employer.
The disobedience of Dongon could not be justly characterized as willful. He neither benefitted from it, nor thereby
prejudiced the business interest of Rapid Movers. His explanation that his deed had been intended to benefit Rapid
Movers was credible.
Rapid Movers argues that the strict implementation of company rules and regulations should be accorded respect
as a valid exercise of its management prerogative. It posits that it had the prerogative to terminate petitioner for
violating its following company rules and regulations. We disagree.
It is true that an employer is given a wide latitude of discretion in managing its own affairs. But the exercise of a
management prerogative like this is not limitless, but hemmed in by good faith and a due consideration of the
rights of the worker. Management prerogative will be upheld for as long as it is not wielded as an implement to
circumvent the laws and oppress labor.
To us, dismissal should only be a last resort, a penalty to be meted only after all the relevant circumstances have been
appreciated and evaluated with the goal of ensuring that the ground for dismissal was not only serious but true. The

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discipline exacted by the employer should further consider the employee’s length of service and the number of infractions
during his employment.The employer should never forget that always at stake in disciplining its employee are not only
his position but also his livelihood, and that he may also have a family entirely dependent on his earnings.
Considering that Dongon’s motive in lending his ID to Villaruz was to benefit Rapid Movers, and considering also that he
had rendered seven long unblemished years of service, his dismissal was plainly unwarranted.
Philippine Span Asia Carriers Corp (Formerly Suplicio Lines) vs Pelayo
Pelayo: accounting clerk; main duties were "to receive statements and billings for processing of payments, prepare
vouchers and checks for the approval and signature of the branch manager, and release checks for payment." Sulpicio
Lines uncovered several anomalous transactions. Most notably, a check issued to a certain "J. Josol" had been altered
from its original amount of P20,804.58 to P820,804.58. The signatories to the check were branch manager Tirso Tan (Tan)
and cashier Fely Sobiaco.
Suplicio’s mgt team investigated; Pelayo was interviewed since "she was the one who personally prepared the cash
vouchers and checks for approval by Tan and Sobiaco." She was asked again for an interview since the investigation was
17
not completed. In the midst of a panel interview, Pelayo walked out. She later claimed that she was being coerced to
18 19
admit complicity with Tan and Sobiaco. Pelayo then returned to Davao City, where she was admitted to a hospital
20
"because of depression and a nervous breakdown." She eventually filed for leave of absence and ultimately stopped
reporting for work.
22
Sulpicio Lines served on Pelayo a memorandum dated March 15, 2010, requiring her to submit a written explanation
concerning "double disbursements, payments of ghost purchases and issuances of checks with amounts bigger than what
23
[were] stated in the vouchers." Sulpicio Lines also placed Pelayo on preventive suspension for 30 days. Sulpicio Lines
also sought the assistance of the National Bureau of Investigation, which asked Pelayo to appear before it. Pelayo did not
appear at NBI but filed a complaint.
Complaint: constructive dismissal
Issue: W/N Pelayo was constructively dismissed? NO
42
While adopted with a view "to give maximum aid and protection to labor," labor laws are not to be applied in a manner
that undermines valid exercise of management prerogative. "In general, management has the prerogative to discipline its
employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations."
Disciplining employees does not only entail the demarcation of permissible and impermissible conduct through company
rules and regulations, and the imposition of appropriate sanctions. It also involves intervening mechanisms "to assure that
50
[employers' rules] would be complied with." These mechanisms include the conduct of investigations to address
employee wrongdoing. Employers are free to adopt different mechanisms such as interviews, written statements, or
probes by specially designated panels of officers.
In the case of termination of employment for for just causes, employers are required to adhere to the so-called "two-notice
52 53
rule." King of Kings Transport v. Mamac outlined what "should be considered in terminating the services of
54
employees" :
(1) The first written notice to be served on the employees should contain the specific causes or grounds for
termination against them, and a directive that the employees are given the opportunity to submit their written
explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of
assistance that management must accord to the employees to enable them to prepare adequately for their
defense. This should be construed as a period of at least 5 calendar days from receipt of the notice to give the
employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and
evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of
the facts and circumstances that will serve as basis for the charge against the employees. Lastly, the notice should
specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is
being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the
employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented against them by the
management.
(3) After determining that termination of employment is justified, the employers shall serve the employees a written
notice of termination indicating that: (1) all circumstances involving the charge against the employees have been

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considered; and (2) grounds have been established to justify the severance of their employment.
The two-notice rule applies at that stage when an employer has previously determined that there are probable grounds for
dismissing a specific employee. The two-notice rule does not apply to anterior, preparatory investigations precipitated by
the initial discovery of wrongdoing. At this stage, an employer has yet to identify a specific employee as a
suspect. subject to the limits of ethical and lawful conduct, an employer is free to adopt any means for conducting these
investigations. When employee wrongdoing has been uncovered, employers are equally free to adopt contingency
measures. Employers can rework processes, reshuffle assignments, enforce stopgap measures, and put in place safety
checks like additional approvals from superiors.
Constructive dismissal? Not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure
sustains a finding of constructive dismissal." The unreasonably harsh conditions that compel resignation on the part of an
employee must be way beyond the occasional discomforts brought about by the misunderstandings between the
employer and employee. Resolving allegations of constructive dismissal is not a one-sided affair impelled by romanticized
sentiment for a preconceived underdog. Rather, it is a question of justice that "hinges on whether, given the
circumstances, the employer acted fairly in exercising a prerogative."
In the case at bar: NO constructive dismissal. There is no objective proof demonstrating how the interview in Cebu
actually proceeded. Other than respondent's bare allegation, there is nothing to support the claim that her interviewers
were hostile, distrusting, and censorious, or that the interview was a mere pretext to pin her down. Respondent's
subsequent hospitalization does not prove harassment or coercion to make an admission either.
Human nature dictates that involvement in investigations for wrongdoing, even if one is not the identified suspect, will
entail discomfort and difficulty. Stress, challenge, and adversity are the natural state of things when a problematic incident
is revealed and begs to be addressed. They do not mean that an employer is bent on inflicting suffering on an employee.
75
respondent's connection with the uncovered anomalies was not "far-fetched." The anomalies related to discrepancies
between vouchers and checks, multiple releases of checks backed by as many vouchers (even if there had only been one
transaction), and a check altered to indicate a larger amount, thereby enabling a larger disbursement. Certainly, it made
sense to involve in the investigation the accounting clerk whose main duty was to "prepare vouchers and checks for the
approval and signature of the Branch Manager, and release the checks for cash payment." In prior jurisprudence, this
Court has been so frank as to view an employee's preemption of investigation as a badge of guilt.
GUIDELINES IN DISPOSITION OF LABOR DISPUTES
Mansion Printing Center, Cheng vs Bitara
Mansion: prints quality self-adhesive labels, brochures, posters, stickers, packaging and the like
Bitara: helper (kargador), promoted to driver picking up raw materials, collect account receivables, deliver products to
clients within delivery schedules; always late and absent, sent memos, apologized. Still, he was late and absent many
times. Memo why he should not be terminated, no explanation and never reported for work after. He was sent a Notice of
Termination saying he was terminated for his gross negligence in duties. Given financial assistance 1 month salary,
insisted on 2 months salary, company declined.
Bitaras version: 1 week LOA due to urgent family problem (March 17-23)
Complaint: ID, reinstatement and backwages.
Issue: W/N Bitara was ID? NO
His 1 week LOA was not the only basis for his termination. That the recent absences were unauthorized were
satisfactorily established by petitioners. Delia Abalos, a “binder/finisher” of the company, stated in her Affidavit that she
never received a call from respondent nor his wife regarding his absences from March 11-16 and 17-23 during the month
40
of March 2000. On the other hand, Ritchie Distor, a messenger of the company, narrated in his Affidavit that, upon
instruction of the Management, he went to respondent’s house on 13 March 2000 to require him to report for work.
Instead of relaying the message to him, as respondent would have it, the wife informed him that respondent had already
left the house but that she did not know where he was going.
The imputed absence and tardiness of the complainant are documented. He faltered on his attendance 38 times of the 66
working days. His last absences on 11, 13, 14, 15 and 16 March 2000 were undertaken without even notice/permission

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from management. These attendance delinquencies may be characterized as habitual and are sufficient justifications to
terminate the complainant’s employment.
50
gross negligence is “want of care in the performance of one’s duties” and habitual neglect is “repeated failure to
perform one’s duties for a period of time, depending upon the circumstances.”
We cannot simply tolerate injustice to employers if only to protect the welfare of undeserving employees. While it is true
that compassion and human consideration should guide the disposition of cases involving termination of employment
since it affects one's source or means of livelihood, it should not be overlooked that the benefits accorded to labor do
not include compelling an employer to retain the services of an employee who has been shown to be a gross
liability to the employer. The law in protecting the rights of the employees authorizes neither oppression nor self-
destruction of the employer. It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a
recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of
justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring
labor over the interests of management but never should the scale be so tilted if the result is an injustice to the
employer. Justitia nemini neganda est
Procedural: Procedural due process entails compliance with the two-notice rule in dismissing an employee, to wit: (1) the
employer must inform the employee of the specific acts or omissions for which his dismissal is sought; and (2) after the
employee has been given the opportunity to be heard, the employer must inform him of the decision to terminate his
employment.
Davis Cheng did both. First, he indicated in the notices the notation that respondent “refused to sign” together with the
corresponding dates of service. Second, he executed an Affidavit stating that: (1) he is the GM; (2) he personally served
each notice upon respondent, when respondent went to the office/factory on 17 March 2000 and 21 March 2000,
respectively; and (3) on both occasions, after reading the contents of the memoranda, respondent refused to
acknowledge receipt thereof. We are, thus, convinced that the notices have been validly served.
GUIDELINES ON IMPOSITION OF PENALTY
Valiao vs CA, NLRC, West Negros College (WNC)
Valiao: appointed as Student Affairs Office Director and Acting Director of Alumni Affairs Office; 2 months later, transferred
to staff position and designated as Records Chief, but again reassigned as typist the next year due to tardiness and
absences. Copies of his tardiness/absences reports were furnished to him, with memoranda for him to explain, but his
explanations were unsatisfactory. He did not change his habits and even tried to manipulate the bundy clock. Suspended
for 15 days due to dishonesty. When he returned, he was still always late and absent. Explained to the college president,
given another chance.
He was asked to prepare a media blitz of the victory of WNC against the officials of the union in an NLRC case, but he did
not comply because such would only worsen the strained relations between the management and the Union. He was
transferred to the College of Liberal Arts as Records Evaluator, but the dean complained about his poor performance and
absenteeism.
He was absent again, and turned out he was arrested in Bacolod in a drug raid and was found possessing marijuana
roaches in his shoe. The event was publicized showed him as an Economics teacher at WNC. He and others were
charged with violating DDA. He was asked to explain in 24 hours why he should not be terminated. He wasn’t able to
answer since he was in jail.
He was dismissed for failure to answer the memo. He wrote to WNC President asking for due process, it was granted. He
was then placed under preventive suspension and an investigation committee was organized to conduct the probe. After
the investigation, the committee recommended his dismissal. A notice of termination was then sent to petitioner informing
him of his termination from the service for serious misconduct and gross and habitual neglect of duty. The petitioner
received the notice.
Complaint: Illegal suspension, ID, backwages, salary differential, moral and exemplary damages
Issue: W/N Valiao was illegally dismissed? NO
Serious misconduct and habitual neglect of duties are among the just causes for terminating an employee under the

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Labor Code. Gross negligence connotes want of care in the performance of ones duties. Habitual neglect implies
repeated failure to perform ones duties for a period of time, depending upon the circumstances.
Petitioners repeated acts of absences without leave and his frequent tardiness reflect his indifferent attitude to and lack of
motivation in his work. More importantly, his repeated and habitual infractions, committed despite several warnings,
constitute gross misconduct. This Court has held that habitual absenteeism without leave constitute gross negligence and
is sufficient to justify termination of an employee.
Valiao, his services were terminated by private respondent after having been found guilty of serious
misconduct and gross habitual neglect of duty which was aggravated by the January 28, 1993 incident. In exercising
such management prerogative, due process was properly observed. Private respondent presented sufficient evidence to
support its act in terminating the services of petitioner. Private respondent took into consideration the totality of the
infractions or the number of violations committed by petitioner during the period of employment. Indeed, even
without the arrest incident, WNC had more than enough basis for terminating petitioner from employment.
Needless to say, so irresponsible an employee like petitioner does not deserve a place in the workplace, and it is within
the managements prerogative of WNC to terminate his employment.Even as the law is solicitous of the welfare of
employees, it must also protect the rights of an employer to exercise what are clearly management prerogatives.
Records reveal that petitioner was afforded the twin requirements of notice and hearing and was likewise given the
opportunity to defend himself before the investigating committee.
Etcuban vs Suplicio Lines Inc (SLI)
SLI: engaged in domestic shipping

Etcuban: Chief Purser of M/V Surigao Princess, handled funds of the vessel and was custodian of all passage tickets and
bills of lading. His responsibility includes issuing passage tickets and receive payments from customers and issue
receipts, he also disburses salaries of crewmen. In a surprise examination by the Jefe, it was discovered that several
yellow passengers duplicate original of yet to be sold or unissued passage tickets already contained the amount of P88.00
the fare for adult passengers for the Cagayan de Oro to Jagna, Bohol route. He noticed that three other original copies
which made up the full set did not bear the same impression, although they were supposed to have been prepared at the
same time. The jefe de viaje dug deeper. He found inordinate amount of ticket issuances for children at half the fare
of P44.00 in Voyage 434 of the vessel.
After disembarking at Port of Cebu, Etcuban received a memo to explain and warned him that failure to comply would be
a waiver of his right to be heard. He was also preventively suspended. Upon arrival at the office, he was questioned by Mr
Go Senior Executive VP and GM of SLI. He was preliminarily investigated. The next day, he was replaced by Almonicar
and was fired.
th
Pending suspension and investigation he filed a complaint: ID, non pay of 13 , OT, and other benefits; he denied that he
was guilty of any wrong doing and the handwriting on the tickets was not his.
Issue: W/N Etcuban was illegally dismissed? NO
Loss of confidence as a just cause for termination of employment is premised from the fact that an employee concerned
holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate
matters, such as the custody, handling, or care and protection of the employers property. But, in order to constitute a just
cause for dismissal, the act complained of must be work-related such as would show the employee concerned to be unfit
to continue working for the employer.
[46]
The degree of proof required in labor cases is not as stringent as in other types of cases. It must be noted, however, that
recent decisions of this Court have distinguished the treatment of managerial employees from that of rank-and-file
personnel, insofar as the application of the doctrine of loss of trust and confidence is concerned. Thus, with respect to
rank-and-file personnel, loss of trust and confidence as ground for valid dismissal requires proof of involvement in the
alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be
sufficient. But as regards a managerial employee, the mere existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his dismissal.

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Etcbuan is not an ordinary rank and file employee. Being the Chief Purser, he occupied a highly sensitive and critical
position and may thus be dismissed on the ground of loss of trust and confidence.
The requirement that there be some basis or reasonable ground to believe that the employee is responsible for
the misconduct was sufficiently met in the case at bar. As Chief Purser, he cannot feign ignorance on the irregularity
as he had custody of the tickets when the anomaly was discovered. It would not be amiss to suppose that he, who would
benefit directly or indirectly from the fruits of such fraudulent scheme, was a party to such irregularity. While, indeed, it
was not proved that he was the one who made the irregular entries on the tickets, the fact that he did not lift a
finger at all to determine who it was is a sad reflection of his job. His failure to detect any anomaly in the passage
tickets amounts to gross negligence and incompetence, which are, likewise, justifiable grounds for his dismissal.
Too harsh because he served 16 years and had no derogatory record, and amount involved is minuscule? NO MERIT.
Employers, generally, are allowed a wider latitude of discretion in terminating the employment of managerial personnel or
those of similar rank performing functions which by their nature require the employers trust and confidence, than in the
case of ordinary rank-and-file employees.
The fact that eh has worked with the respondent for more than 16 years, if it is to be considered at all, should be taken
against him. The infraction that he committed, vis-a-vis his long years of service with the company, reflects a
regrettable lack of loyalty. Whether or not SLI was financially prejudiced is immaterial. Also, what matters is not the
amount involved, be it paltry or gargantuan; rather the fraudulent scheme in which the petitioner was involved, which
constitutes a clear betrayal of trust and confidence. In fact, there are indications that this fraudulent act had been done
before, and probably would have continued had it not been discovered.
Unlike other just causes for dismissal, trust in an employee, once lost, is difficult, if not impossible, to regain. NO
separation pay because it reflected on his moral character.
TERMINATION OF EMPLOYMENT BY EMPLOYEE
Azcor Manufacturing Inc, Filipinas Paso, Zuluaga vs NLRC, Capulso
Capulso: ceramics worker for more than 2 years (1989 to 1992) with 118 peso wage, but 50 pesos was deducted during
April to Sept. 1989; SL due to bronchial asthma caused by his job as ceramics worker (no occupational safety gadgets,
inhaled harmful ceramic dusts); when he returned, Azcor did not allow him to work
Complaint: Constructive ID and Illegal deduction
Defense of Azcor: there was no EER, because Capulso was employee of Filipinas Paso. He resigned from Azcor as
shown by a resignation letter and Joined Filipinas Paso, but also resigned from Filipinas Paso (as seen in resignation
letter) after terminal leave. He tried to apply again but there was no vacancy.
Issue: W/N Capulso was ID? YES.
To constitute a resignation, it must be unconditional and with the intent to operate as such. There must be an intention to
relinquish a portion of the term of office accompanied by an act of relinquishment. I n the instant case, the fact that
Capulso signified his desire to resume his work when he went back to AZCOR after recuperating from his illness, and
actively pursued his case for ID, negated any intention on his part to relinquish his job at AZCOR.
the subject resignation letters readily reveals: (a) the resignation letter to Filipinas Paso was identically worded with that to
AZCOR; (b) both were pre-drafted with blank spaces filled up with the purported dates of effectivity of his resignation; and,
(c) it was written in English, a language which Capulso was not conversant with considering his low level of education. No
other plausible explanation can be drawn from these circumstances than that the subject letters of resignation were
prepared by a person or persons other than Capulso. He also categorically disowned the signatures therein and
denied having executed them clearly indicates that the resignation letters were drafted without his consent and
participation.
In illegal dismissal cases like the present one, the onus of proving that the dismissal of the employee was for a valid and
authorized cause rests on the employer and failure to discharge the same would mean that the dismissal is not justified
and therefore illegal. Petitioners failed in this regard.

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Solidarily liable for back wages of Capulso? The corporate fiction was used as a means to perpetrate a social injustice or
as a vehicle to evade obligations or confuse the legitimate issues, it would be discarded and the two (2) corporations
would be merged as one, the first being merely considered as the instrumentality, agency, conduit or adjunct of the other.
There was much confusion as to the identity of Capulsos employer - AZCOR or Filipinas Paso; but, for sure, it was
petitioners' own making, as shown by the following: First, Capulso had no knowledge that he was already working under
Filipinas Paso since he continued to retain his AZCOR ID; Second, his payslips contained the name of AZCOR; Third, he
was paid the same salary and he performed the same kind of job, in the same work area, in the same location, using the
same tools and under the same supervisor; Fourth, there was no gap in his employment as he continued to work from the
time he was hired up to the last day of his work; Fifth, the casting department of AZCOR where Capulso was working was
abolished when he, together with 6 others, transferred to Filipinas Paso; and Sixth, the employment contract was signed
by an AZCOR personnel officer, which showed that Capulso was being by AZCOR to do jobs for Filipinas Paso.
Tuason vs Bank of Commerce (BOC), Mesa and Padilla
Tuason: 2002, head of Marketing Dept of Property Mgt Group (PMG) with rank of AVP. Duties include developing and
proposing ways of disposing BOC’s real and acquired properties and assets (ROPOA) in the soonest time possible, with
least possible cost, and best possible price.
In 20015, administratively charged with regarding sale of ROPOA properties to a certain Cuizon. She was suspended for
30 days. In 2006, she was given a 63% performance rating.
Sector head Padilla asked her to resign but she said she had no intention of resigning as she was happy with her work.
She also asked for a LOA due to stress. Her request was disapproved. She was advised to report to EVP Manuel and
Padilla to have a meeting on her graceful exit. However, she suddenly received a BOC flyer welcoming a new PMG Head.
This caused her stress and reiterated her request for leave. She wrote a letter inquiring about her status since was
effectively relieved of her position with the designation of the new PMG head.
She was told to report to Padilla for her new assignment. When she failed to report for work, she was sent another letter
to get in touch with Padilla otherwise she would be deemed to have lost interest in her employment.
Complaint: Constructive Dismissal due to the confusing letters of BOC.
Issue: W/N Tuason was ID? YES.
BOC, acting through Padilla, was consistently exerting pressure on Tuason to resign as early as June 19, 2007. This
was documented in the July 5, 2007 Office Memo of Tuason addressed and sent to Padilla, a copy of which was sent to
Uranza. The letter chronicled the exchanges between Padilla and Tuason regarding her employment with BOC. Tuason
first mentioned that Padilla had already hired someone to head the PMG. Then she said that she had been asked to
resign without any explanation as to why. Save for the offer of consultancy work after her resignation, she was never
offered a transfer or movement within BOC. The above-mentioned developments being stressful on her, Tuason then
wrote that she would be filing for a leave of absence in order to diffuse the situation.
we are persuaded that she was indeed asked to resign by Padilla as BOC opted to keep silent by not replying to her
memorandum addressed to Padilla, depicting the act of Padilla in requiring complainant to file her courtesy resignation
and have a graceful exit to save face and avoid embarrassment due to the hiring of Estrada as her replacement.
Considering respondents continued silence on the said memo, there can be no other conclusion that can be drawn
therefrom, except that the contents of the said memo are true and actually transpired.
The exchange of memos and letters above readily shows that Tuasons July 5, 2007 memo (that she was being asked to
resign by Padilla) spoke the truth. BOC wanted her out. They sought her resignation. When this was not forthcoming, and
instead of offering her some viable options or alternatives for her exit, BOC simply proceeded to install Estrada as the
head of PMG. BOCs act of hiring Estrada and having him take over the position of Tuason on July 16, 2007 was certainly
a definitive act, categorical and complete in itself, to effectively oust her from her post.
Reassignment to BOC’s business segment was MP? Even though transfers or reassignments per se are indeed valid and
fall within the ambit of management prerogatives, the exercise of these rights must remain within the boundaries of justice

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and fair play.
BOC submitted that in 2005, Tuason was administratively charged and suspended. This, however, happened two years
earlier. Besides, she had paid her dues for that infraction. She was suspended. BOC then mentioned that in 2006, Tuason
got a poor 63% performance rating. BOC failed to present or establish any connection that it was taking proper steps to
either transfer/reassign or sever Tuasons services altogether because of this dismal rating.
Instead, BOC totally shied away from owning up the attempts to convince Tuason to resign. There was no offer or even
mention of a transfer or reassignment until July 26, 2007. By this time, it was too late. BOC had hired Estrada to head the
PMG. Estrada had assumed the functions of the post and taken over her office on July 16, 2007. This all happened while
Tuason was on leave, without a formal or official communication or advice if she was fired, transferred or reassigned.
Worse, at the time that this was happening, Tuason went to the office upon Uranzas several directives. At the office, she
saw for herself the flyers boldly announcing the appointment and assumption of Estrada to the very same position that
she was still occupying. Still, what was more embarrassing and painful for Tuason was when she saw Estrada already
occupying her office and meeting with her subordinate officers and staff.
This is clearly a case of constructive dismissal. The test of constructive dismissal is whether a reasonable person in the
employee's position would have felt compelled to give up his position under the circumstances. Constructive
dismissal is a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to
protect their rights and interests from the coercive acts of the employer.
FORCED RESIGNATION
Saudia and Betia vs Rebesencio et al
Saudia: Saudi Arabian corporation with a Ph office in Makati.

Rebesencio and 3 others: Flight attendants; Separated on various dates because they were pregnant. They alleged that
they informed Saudia of their pregnancies and went thru the proper procedures to process their maternity leaves. Initially.
Saudia approved but later Jeddah mgt disapproved and instead required them to file their resignation letters. If they did
not resign, Saudia threatened to terminate them. These were pursuant to their "Unified Employment Contract for Female
Cabin Attendants" which said that “ if the Air Hostess becomes pregnant at any time during the term of this
contract, this shall render her employment contract as void and she will be terminated due to lack of medical
”
fitness.
Rebesencio et al claimed that his unified contract took effect after they had filed their maternity leave and were approved.
They did not file resignation letters but gave appeal letters, all of which were rejected.
Faced with the dilemma of resigning or totally losing their benefits, they executed handwritten resignation letters. In
Montassah's and Rouen Ruth's cases, their resignations were executed on Saudia's blank letterheads that Saudia had
provided. These letterheads already had the word "RESIGNATION" typed on the subject portions of their headings when
these were handed to respondents.
Complaint: ID and underpayment of salary and benefits
Issue: W/N they were illegally dismissed or voluntarily resigned? ID.
voluntary resignation as "the voluntary act of an employee who is in a situation where one believes that personal reasons
cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from
employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office
accompanied by the act of relinquishment." Thus, essential to the act of resignation is voluntariness.
As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the
alleged resignation must be considered in determining whether he or she, in fact, intended, to sever his or her
employment
The termination of respondents' employment happened when they were pregnant and expecting to incur costs on account
of child delivery and infant rearing. Pregnancy is a time when they need employment to sustain their families. Indeed, it
goes against normal and reasonable human behavior to abandon one's livelihood in a time of great financial
need.
It is clear that respondents intended to remain employed with Saudia. All they did was avail of their maternity leaves. It is
also clear that respondents exerted all efforts to' remain employed with Saudia. Each of them repeatedly filed appeal
letters (as much as 5 letters in the case of Rebesencio) asking Saudia to reconsider the ultimatum that they resign or be
terminated along with the forfeiture of their benefits. Some of them even went to Saudia's office to personally seek
reconsideration.

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Respondents also adduced a copy of the "Unified Contract”, which contained threat of termination (and the forfeiture of
benefits that it entailed). This is enough to compel a reasonable person in their position to give up his or her employment.
Their resignation letters are proof of how any supposed resignation did not arise from respondents' own initiative. Their
resignations were executed on Saudia's blank letterheads that Saudia had provided. These letterheads already had
the word "RESIGNATION" typed on the subject portion of their respective headings when these were handed to
respondents. Saudia makes much of how respondents supposedly completed their exit interviews, executed quitclaims,
received their separation pay, and took more than a year to file their Complaint. If at all, however, these circumstances
prove only the fact of their occurrence, nothing more. Mere compliance with standard procedures or processes, such as
the completion of their exit interviews, neither negates compulsion nor indicates voluntariness.
Entitled to backwages and separation pay + moral damages
TERMINATION OF EMPLOYMENT BY EMPLOYER

BASIS: SELF PROTECTION
Yabut vs Meralco, Lopez
Yabut: Worked from Feb 1989 to Feb 2004; Malabon Branch Field Representative tasked to conduct surveys on service
applications, test electric meters, investigate consumer-applicants’ recorts of Violations of Contract and other duties as
required by his superior
Inspection Office issued memo to Meralco’s Investigation Legal Office regarding an illegal service connection (there were
shunting wires installed on the meter base registered in Yabut’s name) in the house of Yabut. The wires allowed power
transmission in his house despite the fact that Meralco earlier disconnected his service due to unpaid bills.
Meralco issued notice received by Yabut’s wife for Yabut to report to its office and reminded him that the offense
(Dishonesty) is punishable with dismissal on the first offense. In defense, Yabut claimed that before his wife got the notice,
he already paid P8,432 for his outstanding bills and denied knowing the person who installed the shunting wires. He
claims that he did not always go home to that house, but instead stayed in his sister’s house regularly. He claims his
residence’s electricity was thru a connection made to the line of his neighbor Jojo.
After investigation, his was given a notice of dismissal citing violations of Meralco’s Company Code on Employee
Discipline and Art. 282 a, c, d, e LC as causes for dismissal.
Issue: W/N Yabut was ID? NO.
Article 282. An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
We note that his employment was terminated for violation of Section 7, par. 3 of Meralco's Company Code on Employee
Discipline, and for the existence of just cause under Article 282 (a), (c), (d) and (e) of the Labor Code.
His violation of the company rules was evident. It is significant that said SIN 708668501 is registered under his name, and
its meter base is situated within the premises of his property. Said meter registered electric consumption during the time
his electric service was officially disconnected by Meralco. His claim that he failed to know or even notice the shunted
wires fails to persuade as we consider the meter located in the front of his house, the nature of his work as branch field
representative, his long-time employment with Meralco and his familiarity with illegal connections of this kind.
Significantly, “tampering with electric meters or metering installations of the Company or the installation of any device, with
the purpose of defrauding the Company” is classified as an act of dishonesty from Meralco employees, expressly
prohibited under company rules. It is reasonable that its commission is classified as a severe act of dishonesty,
punishable by dismissal even on its first commission.
Article 282 (a) provides that an employer may terminate an employment because of an employee's serious misconduct, a
cause that was present in this case in view of his violation of his employer's code of conduct. For serious misconduct to
justify dismissal, the following requisites must be present: (a) it must be serious; (b) it must relate to the performance of
the employee's duties; and (c) it must show that the employee has become unfit to continue working for the employer.

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Installation of shunting wires is without doubt a serious wrong as it demonstrates an act that is willful or deliberate,
pursued solely to wrongfully obtain electric power through unlawful means. The act clearly relates to Yabut’s performance
of his duties given his position as branch field representative who is equipped with knowledge on meter operations, and
who has the duty to test electric meters and handle customers' violations of contract.
The dismissal is also justified as the act imputed upon the petitioner qualifies as “fraud or willful breach by the employee
of the trust reposed in him by his employer or duly authorized representative”. it is undisputed that at the time of his
dismissal, he was holding a supervisory position, one of trust and confidence requiring a high degree of honesty as
compared with ordinary rank-and-file employees. Also, the acts complained of were clearly work-related because they
related to matters he handled as branch field representative.
Procedural? YES. The first required notice was dated November 3, 2003, sufficiently notifying him of the particular acts
being imputed against him, as well as the applicable law and the company rules considered to have been violated.
On November 17, 2003, Meralco conducted a hearing on the charges against him. HE was accorded the right to air his
side and present his defenses on the charges against him. Significantly, a high-ranking officer of the supervisory union of
Meralco assisted him during the said investigation.
Finally, Meralco served a notice of dismissal which contained the company's decision to dismiss him from employment on
the grounds clearly discussed therein.
REQUISITES OF LAWFUL DISMISSAL

Realda vs New Age Graphics Inc (NAGI), Mirasol
Realda: former machine operator of NAGI
Complaint: ID
Defense: NAGI charged with him destroying NAGI’s property and disloyalty to NAGI and its objectives; unjustified refusal
to render OT work, unexplained failure to observe prescribed work standards, habitual tardiness, and chronic
absenteeism, non-compliance with directives to explain his absences.
Issue: W/N Realda was ID? NO.
Substantive due process was complied with.
First, his arbitrary defiance to Graphics’s order for him to render overtime work constitutes willful
disobedience. Furthermore, he had an inclination to absent himself and to report late for work despite being previously
penalized. In RB Michael Press vs Galit, we held that an employer has the right to require the performance of OT service
in any of the situations contemplated under Article 89 LC (Emergency OT work) and an employee’s non-
compliance is willful disobedience.
Second, his failure to observe work standards constitutes inefficiency that is a valid cause for dismissal. Such
inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within
the alloted reasonable period, or by producing unsatisfactory results. He is mandated to check whether the colors that
would be printed are in accordance with the clients specifications and for him to do so, he must consult the General
Manager and the color guide used by Graphics, Inc. before making a full run. Unfortunately, he proceeded to print
without making sure that the colors were at par with the clients demands. This resulted to delays in the delivery of
output, client dissatisfaction, and additional costs on Graphics’s part.
The procedure laid down by Graphics, Inc. does not appear to be unreasonable or unnecessarily difficult. It is necessary
and relevant to the achievement of Graphics’s objectives. His non-compliance hard to comprehend.
While a penalty in the form of suspension had already been imposed on him for his habitual tardiness and repeated
absenteeism, the principle of totality of infractions sanctions the act of Graphics of considering such previous
infractions in decreeing dismissal as the proper penalty for his tardiness and unauthorized absences incurred afterwards,
in addition to his refusal to render overtime work and conform to the prescribed work standards. In Merin vs NLRC:
Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character,
conduct and ability separate and independent of each other.While it may be true that petitioner was penalized for
his previous infractions, this does not mean that his employment record would be wiped clean of his infractions.
Procedural due process was not complied with.

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King of Kings Transport vs Mamac laid down the manner:
1) The first written notice to be served on the employees should contain the specific causes or grounds for
termination against them, and a directive that the employees are given the opportunity to submit their written
explanation within a reasonable period. "Reasonable opportunity" means every kind of assistance that
management must accord to the employees to enable them to prepare adequately for their defense. This
should be construed as a period of at least 5 calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and
decide on the defenses they will raise against the complaint.
Moreover, the notice should contain a detailed narration of the facts and circumstances that will serve as basis
for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should
specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is
being charged against the employees.
2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the
employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented against them by the
management.
During the hearing or conference, the employees are given the chance to defend themselves personally, with the
assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by
the parties as an opportunity to come to an amicable settlement.
3) After determining that termination of employment is justified, the employers shall serve the employees a written
notice of termination indicating that: (1) all circumstances involving the charge against the employees have
been considered; and (2) grounds have been established to justify the severance of their employment.
Graphics, Inc. failed to afford him with a reasonable opportunity to be heard and defend itself. An administrative hearing
set on the same day that he received the memorandum and the 24 hour period for him to submit a written explanation are
far from being reasonable. Furthermore, there is no indication that Graphics, Inc. issued a second notice, informing the
petitioner of his dismissal.
Thus, he is entitled to 30k nominal damages.
SUBSTANTIVE REQUIREMENTS
SERIOUS MISCONDUCT
Northwest Airlines vs Del Rosario
Del Rosario: Manila-based flight attendant; Was assigned at business class section of Flight NW 26 bound for Japan.
During boarding preparations, fellow flight attendant Gamboa borrowed wine bottle opener from her. Del Rosario
remarked that any flight attendant who could not bring a wine bottle opener had no business working in the First Class
Section. The two had a heated argument prompting the Base Manager to try to pacify them but they would not stop. Since
they were still fighting even though the passengers were already boarding, they were transferred to another aircraft. Since
they were not willing to settle, they were not allowed to fly.
Defense of Del Rosario: only an animated discussion transpired.
They were then served with a Notice of Removal from Service effectively informing Del Rosario of her dismissal from the
service pending an investigation of the fighting incident between her and Gamboa. Northwest stated that based on the
results of the investigation, Del Rosario and Gamboa had engaged in a fight on board the aircraft, even if there had been
no actual physical contact between them; and that because fighting was strictly prohibited by Northwest to the point that
fighting could entail dismissal from the service even if committed for the first time, Northwest considered her dismissal
from the service justified and in accordance with the Rules of Conduct for Employees.
Complaint: ID
Issue: W/N Del Rosario was ID? YES
Misconduct or improper behavior, to be a just cause for termination of employment, must: (a) be serious; (b) relate to the
performance of the employee’s duties; and (c) show that the employee has become unfit to continue working for the

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employer.
The last 2 elements of misconduct were present in this case. The cause of her dismissal related to the performance of her
duties as a flight attendant, and she became unfit to continue working for Northwest.
BUT was the misconduct was serious as to merit her dismissal?
In several rulings where the meaning of fight was decisive, the Court has observed that the term fight was considered
to be different from the term argument. Fight is not just a merely verbal tussle but a physical combat between two
opposing parties.
The incident could not be justly considered as akin to the fight contemplated by Northwest. Del Rosario and Gamboa were
arguing but not fighting. Moreover, the claim of Morales that Del Rosario challenged Gamboa to a brawl (sabunutan) could
not be given credence by virtue of its being self-serving in favor of Northwest, and of its being an apparent afterthought on
the part of Morales during the investigation of the incident, without Del Rosario having the opportunity to contest Morales'
statement.
Moreover, even assuming arguendo that the incident was the kind of fight prohibited by Northwest's Rules of Conduct, the
same could not be considered as of such seriousness as to warrant Del Rosario's dismissal from the service. The gravity
of the fight not enough to tarnish or diminish Northwest's public image.
Sterling Paper Products Enterprises Inc vs KMM-Katipunan and Esponga
Esponga: Machine operator; Suspended for 20 days for participating in a wildcat strike. The Notice of Disciplinary Action
contained a warning that a repetition of a similar offense would compel the management to impose the maximum penalty
of termination of services.
Esponga and others were caught by the Supervisor Vinoya about to take a nap on the sheeter machine, and were
prohibited due to safety reasons. They transferred to the mango tree near the staff house and when Vinoya passed by,
Esponga said “"Huwag maingay, puro bawal." She then confronted Esponga, who responded in a loud and disrespectful
tone, "Puro kayo bawal, bakit bawal ba magpahinga?" When Vinoya turned away, Esponga gave her the "dirty finger" sign
in front of his co-employees and said "Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin." The
incident was witnessed by Pesimo who executed a handwritten account thereon (but later recanted)
Later that day, he did not work and he was just having a conversation with his co-employees. He also failed to submit his
daily report from June 21-29, 2010. He was served with a notice to explain and to attend an administrative hearing.
Esponga denied the charges and claimed he was not in the area where the incident took place. He failed to attend the
hearings. Finding him guilty of gross and serious misconduct, he was sent a Notice of Termination.
Complaint: ID, ULP, damages
Issue: W/N Esponga was ID? NO
Pesimo’s retraction has no probative value, her earlier statement prevails; it was more credible.
For misconduct or improper behavior to be a just cause for dismissal, the following elements must concur: (a) the
misconduct must be serious; (b) it must relate to the performance of the employee's duties showing that the employee has
become unfit to continue working for the employer; and (c) it must have been performed with wrongful intent.
First, utterance of obscene, insulting or offensive words against a superior is not only destructive of the morale of his co-
employees and a violation of the company rules and regulations, but also constitutes gross misconduct.
Further, Esponga's assailed conduct was related to his work. Vinoya did not prohibit him from taking a nap. She merely
reminded him that he could not do so on the sheeter machine for safety reasons. Esponga's acts reflect an unwillingness
to comply with reasonable management directives.
Finally, Esponga was motivated by wrongful intent. To reiterate, Vinoya prohibited Esponga from sleeping on the sheeter
machine. Later on, when Vinoya was passing by, Esponga uttered "Huwag maingay, puro bawal." When she confronted
him, he retorted "Puro kayo bawal, bakit bawal ba magpahinga?" Not contented, Esponga gave her supervisor the "dirty
finger" sign and said "Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin." It must be noted that
he committed all these acts in front of his co-employees, which evidently showed that he intended to disrespect and
humiliate his supervisor.
No matter how the employee dislikes his employer professionally, and even if he is in a confrontational disposition, he
cannot afford to be disrespectful and dare to talk with an unguarded tongue and/or with a baleful pen.
WILLFUL DISOBEDIENCE (INSURBODINATION)
Lores Realty Enterprises Inc (LREI), Sumulong vs Pacia
Pacia: Assistant manager and OIC of LREI’s Accounting Department. The Acting GM Sumulong directed Pacia to prepare
a check voucher as payment to its obligations to BPI. Pacia did not immediately comply. After 2 repeated directives, she
eventually prepared a check. She was again asked to paper a check voucher but was again slow in obeying. After
insistence of Sumulong, she prepared the check.
Pacia reasoned out that the funds in LREI’s account were insufficient. The next day, Sumulong issued a memo ordering

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her to explain why she refused to follow a clear and lawful directive. She replied that she only wanted to protect LREI from
liability under BP 22.
The received notice of termination for her willful disobedience and loss of trust and confidence.
Complaint: ULP due to Harassment, Constructive Dismissal, Moral and Exemplary Damages. Amended to ID and non
payment of salaries.
Issue: W/N Pacia was ID?
Willful disobedience requires the concurrence of 2 requisites: (1) the employee’s assailed conduct must have been willful,
that is characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful,
made known to the employee and must pertain to the duties which he had been engaged to discharge.
There was nothing unlawful in the directive of Sumulong to prepare checks in payment of LREI’s obligations. The
availability or unavailability of sufficient funds to cover the check is immaterial in the physical preparation of the checks.
Pacia’s initial reluctance to prepare the checks, however, was for honest and well intentioned reasons. Protecting
LREI and Sumulong from liability under the BP 22 was foremost in her mind. It was not wrongful or willful. Neither can it
be considered an obstinate defiance of company authority. Pacia in fact eventually did prepare the checks on the same
day she was tasked to do it.
Pacia’s apprehension was justified when the check was dishonored. This clearly affirms her assertion that she was just
being cautious and circumspect for the company’s sake.
In finding for Pacia, the Court is guided by the time-honored principle that if doubt exists between the evidence presented
by the employer and the employee, the scales of justice must be tilted in favor of the latter.
Transglobal Maritime Agency, Goodwood ShipManagement, Estaniel vs Chua
Chua: Able Seaman on board MT WAWASAN RUBY. He joined the vessel on a 9-month duty with first 3 months as
probation period at the owner's option to continue his service for further period of six (6) months subject to satisfactory
performance. After 3 months, we was rehired as Able Seaman with 6 month duration.
While at a port in Taiwan, Chua and 4 others left the vessel from 7-10PM. When they returned, the Captain was infuriated.
They were served with a written reprimand saying they have breached the Shipboard Discipline Standards (returned after
midnight misbehaved and argued with Chief Officer in Master’s presence; Chua was an average performer and he had
just finished 3 months on board; Chua reprimanded that if his behavior does not comply with shipboard discipline
standards, he may be dismissed).
Chua et al refused the sign and acknowledge the reprimand and the logbook entry on that matter. They returned to the Ph
the next month and Chua filed a complaint.
Complaint: ID, non payment of salaries, withholding of documents, moral and exemplary damages; He alleged that they
returned late because a problem with their vehicle and immediately went to the Ship’s office to return their passports and
documents but the captain was furious. They did not sign the written reprimand because it contained falsehoods
Defense of Transglobal: refusal to sign the written reprimand was insubordination and disrespect towards superior
officers. They also agreed to be dismissed.
Issue: W/N Chua was ID? YES
The vessel's logbook is the official repository of the day-to-day transactions and occurrences on board the vessel. It is
where the captain records the decisions he has adopted, a summary of the performance of the vessel, and other daily
events.
A perusal of the General Reporting on the ship's logbook reveals that Chua was penalized with a written reprimand for his
arrival after the expiration of shore leave. It was also indicated that he refused to sign the receipt of the written reprimand,
and that he was warned of immediate dismissal if he refused to sign the logbook entry. From the foregoing, it can be
logically concluded that Chua's dismissal was contemplated only after his refusal to sign the logbook entry.

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The Statement of Witnesses merely stated that Chua "has been found to be in breach of the shipboard discipline
standards." Any supporting evidence regarding the allegation of "arguing and misbehaving" of Chua that night was never
specified in the statement, as well as in the logbook. That the undated statement of witnesses was executed after Chua's
dismissal due to refusal to sign the logbook entry was evident from the fact that the said detail was included therein. It was
executed to confirm the fact that Chua and his companions refused to receive the written reprimand and agreed to be
dismissed. As such, it could not have been used to corroborate the charge against Chua when the written
reprimand was served on January 30, 2012.
As far as proving Chua's alleged arguing and misbehaving upon his return from shore leave is concerned, the logbook
entry is self-serving and uncorroborated. The petitioners should have presented the logbook entry of the January 26, 2012
incident to substantiate any allegations of Chua's misbehavior when he and the others returned from their shore leave. It
is apparent that what was established was that Chua was warned of immediate dismissal if he refused to sign the ship
logbook entry, and that his refusal to sign the written reprimand and the logbook entry prompted his dismissal.
Willful or intentional disobedience of such rule, order or instruction justifies dismissal only where such rule, order or
instruction is (1) reasonable and lawful, (2) sufficiently known to the employee, and (3) connected with the duties which
the employee has been engaged to discharge.
By virtue of the POEA-SEC, Chua is indeed bound to obey the lawful commands of the captain of the ship, but only as
long as these pertain to his duties. Here, there is no relevance to the order to sign the documents in Chua's
performance of his duty as a seaman. The pieces of evidence presented are insufficient to establish that Chua's refusal
was characterized by a wrongful and perverse mental attitude rendering his act inconsistent with proper subordination.
Chua refused to sign the written reprimand for he maintained that the same contained falsehoods. Based on the
statement of witnesses, it was someone else who started arguing and misbehaving before the Master when asked
for a reason for not signing the written reprimand.
Assuming that signing the written reprimand/logbook was a lawful command to be obeyered by a complement of the ship,
dismissal is too harsh.
Procedural due process? NOT COMPLIED WITH. POEA-SEC provides that the Master shall:
A. The Master shall furnish the seafarer with a written notice containing the following:
1. Grounds for the charges as listed in Section 33 of this Contract or analogous act constituting the
same.
2. Date, time and place for a formal investigation of the charges against the seafarer concerned.
B. The Master or his authorized representative shall conduct the investigation or hearing, giving the seafarer the
opportunity to explain or defend himself against the charges. These procedures must be duly documented and
entered into the ship's logbook.
C. If after the investigation or hearing, the Master is convinced that imposition of a penalty is justified, the Master
shall issue a written notice of penalty and the reasons for it to the seafarer, with copies furnished to the
Philippine agent.
D. Dismissal for just cause may be effected by the Master without furnishing the seafarer with a notice of
dismissal if there is a clear and existing danger to the safety of the crew or the vessel. The Master shall send a
complete report to the manning agency substantiated by witnesses, testimonies and any other documents in
support thereof.
In this case, no hearing was conducted respecting Chua's alleged insubordination. The pieces of evidence presented
were also silent about whether Chua was given the opportunity to explain or defend himself. There was also no showing
of imminent danger to the crew or the vessel, so that the required notice may be dispensed with.
GROSS AND HABITUAL NEGLECT OF DUTIES
PNB vs Padao

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Padao: clerk in 1982, later designated as credit investigator in an acting capacity in 1993. In 1995, regular Credit
Investigator III, then promoted to Loan and Credit Officer IV.
In 1994, PNB got embroiled in a scandal involving behest loans. A certain Sih Wat Kai complain to COA that anomalous
loans were being granted by its officers to select bank clients. This triggered separate investigations by COA and PNB’s
Internal Audit Department (IAD). The investigations confirmed the over-appraised accommodations, the default of the
payment of the loand, and PNB’s losses in millions.
Officers of PNB were administratively charged, including Padao. Padao and the Division Chief Velasco were charged with
Dishonesty, Grave Misconduct, Gross Neglect of Duty, Conduct Prejudicial to the Best Interest of the Service, and a
violation of RA 3019. Padao allegedly presented a deceptively positive status of the business, credit standing/rating and
financial capability of 13 loan applicants. It was later found that either said borrowers businesses were inadequate to meet
their loan obligations, or that the projects they sought to be financed did not exist.
PNB found Padao guilty of gross habitual neglect of duty and ordered him dismissed. He tried to appeal to the Board of
Directors but they did not act on his appeal.
Complaint: ID, reinstatement, backwages, treachery/bad faith and palpable discrimination in the treatment of employees
with administrative cases
Issue: W/N Padao was ID? NO.
Gross negligence connotes want of care in the performance of ones duties, while habitual neglect implies repeated failure
to perform ones duties for a period of time, depending on the circumstances. Gross negligence has been defined as the
want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless
disregard of consequences without exerting any effort to avoid them.
The role that a credit investigator plays in the conduct of a banks business cannot be overestimated. The amount of loans
to be extended by a bank depends upon the report of the credit investigator on the collateral being offered. If a loan is not
fairly secured, the bank is at the mercy of the borrower who may just opt to have the collateral foreclosed. If the scheme is
repeated a hundredfold, it may lead to the collapse of the bank.
Padaos repeated failure to discharge his duties as a credit investigator of the bank amounted to gross and habitual
neglect of duties under Article 282 (b). He not only failed to perform what he was employed to do, but also did so
repetitively and habitually, causing millions of pesos in damage to PNB. Thus, PNB acted within the bounds of the law
by meting out the penalty of dismissal, which it deemed appropriate given the circumstances.
That there is no proof that Padao derived any benefit from the scheme is immaterial. What is crucial is that his gross and
habitual negligence caused great damage to his employer. Padao was aware that there was something irregular
about the practices being implemented by his superiors, but he went along with, became part of, and participated in
the scheme.
Padao is not entitled to financial assistance as social justice.
Jumuad vs Hi-Flyer Food Inc, Montemayor
Hi-Flyer: licensed corporation to operate KFC restaurants in the Ph.

Jumuad: initially, Mgt Trainee, eventually became Area Manager (AM) for entire Visayas-Mindanao region;
Her tasks are 1) be highly visible in the restaurants under her jurisdiction; 2) monitor and support day-to-day operations;
and 3) ensure that all the facilities and equipment at the restaurant were properly maintained and serviced. Among the
branches under her supervision were the KFC branches in Gaisano Mall, Cebu City (KFC-Gaisano); in Cocomall, Cebu
City (KFC-Cocomall); and in Island City Mall, Bohol (KFC-Bohol).
rd
Initially she was performing well and was even awarded 3 top Area Manager nationwide with trip to Singapore.

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However, Hi Flyer conducted a food safety, service and sanitation audit at KFC-Gaisano. The audit sanitation violations:
presence of rodents and the use of a defective chiller for the storage of food.
In KFC Bohol, there were cash shortages, delay in deposits of cash, there were cash-for-deposit envelopes with fake
paper money inside, falsifies entries in the deposit logbook, lapses in inventory control, and material product spoilage.
In the KFC-Cocomall branch there were grout and leaks at the kitchen wall, dried up spills from the matinator, a live rat
under the postmix and signed of rodent infestation.
Hi-Flyer sent her an Irregularities Report and Notice of Charges. She gave her written explanation and attended an
administratie hearing with her counsel. Hi-Flyer was not satisfied with her explanations and served her a Notice of
Dismissal.
th
Complaint: ID, reinstatement and separation pay, 13 month, SIL, moral and exemplary damages
Issue: W/N Jumuad was ID? NO.
Jumuad was terminated for neglect of duty and breach of trust and confidence. It should be noted that the finding of guilt
or innocence in a charge of gross and habitual neglect of duty does not preclude the finding of guilty or innocence in a
charge of breach of trust and confidence. Each of the charges must be treated separately.
Jumuad cannot be dismissed on the ground of gross and habitual neglect of duty. While there is apparent neglect of
Jumuad of her duty in ensuring that her subordinates were properly monitored and that she had dutifully done all that was
expected of her to ensure the safety of the consuming public who continue to patronize the KFC branches under her
jurisdiction, considering that over a year had lapsed between the incidences at KFC-Gaisano and KFC-Bohol, and that
the nature of the anomalies uncovered were each of a different nature, the Court finds that her acts or lack of action in
the performance of her duties is not born of habit.
However, Jumuad willfully breached her duties as to be unworthy of the trust and confidence of Hi-Flyer. First, Jumuad
was a managerial employee. The mere existence of the grounds for the loss of trust and confidence justifies her
dismissal. the CERs reports of Hi-Flyer show that there were anomalies committed in the branches managed by
Jumuad. On the principle of respondeat superior alone, she may be held liable for negligence in the performance of her
managerial duties.
Moreover, rather than taking proactive steps to prevent the anomalies at her branches, Jumuad merely effected
remedial measures. In the restaurant business where the health and well-being of the consuming public is at stake, this
does not suffice.
Her mismanagement and negligence in supervising the effective operation of KFC branches in the span of less than a
year, resulting in the closure of KFC-Gaisano due to deplorable sanitary conditions, cash shortages in KFC-Bohol, in
which the said branch was only several months into operation, and the poor sanitation at KFC-Cocomall. The glaring fact
that 3 out of the 7 branches under her area were neglected cannot be glossed over by her explanation that there was
no negligence on her part as the sanitation problem was structural, that she had been usually busy conducting
management team meetings in several branches of KFC in her area or that she had no participation whatsoever in the
alleged cash shortages.
Cavite Apparel Inc, Timoteo vs Marquez
Cavite Apparel: manufactures garments for export

Michelle Marquez: regular employee in Finishing Department; Prior to her dismissal Michelle committed the following
infractions (with their corresponding penalties):
a. First Offense: AWOL on December 6, 1999 – written warning; b. Second Offense: AWOL on January 12, 2000
– stern warning with 3 days suspension; c. Third Offense: AWOL on April 27, 2000 – suspension for 6 days.
In May 2000, Michelle got sick and did not report for work. When she returned, she submitted a medical certificate. Cavite

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Apparel denied receipt of the certificate. Michelle did not report for work on May 15-27, 2000 due to illness. When she
reported back to work, she submitted the necessary medical certificates. Nonetheless, Cavite Apparel suspended
Michelle for 6 days. When Michelle returned, Cavite Apparel terminated her employment for habitual absenteeism.
Complaint: ID, reinstatement, backwages
Issue: WN Michelle was ID? YES.
Neglect of duty must be both gross and habitual. Gross negligence implies want of care in the performance of one’s
duties. Habitual neglect imparts repeated failure to perform one’s duties for a period of time, depending on the
circumstances. Under these standards, Michelle is not guilty of gross and habitual neglect of duties.
Based on the records, there simply cannot be a case of gross and habitual neglect of duty against Michelle. Even
assuming that she failed to present a medical certificate for her sick leave on May 8, 2000, the records are bereft of any
indication that apart from the 4 occasions when she did not report for work, Michelle had been cited for any infraction
since she started her employment with the company in 1994. 4 absences in her 6 years of service cannot be
considered gross and habitual neglect of duty, especially so since the absences were spread out over a six-month
period.
Although Michelle was fully aware of the company rules regarding leaves of absence, and her dismissal might have been
in accordance with the rules, it is well to stress that we are not bound by such rules. The penalty of dismissal imposed
on her unjustified under the circumstances. Michelle had been in Cavite Apparel’s employ for six years, with no
derogatory record other than the four absences without official leave in question, not to mention that she had already been
penalized for the first three absences, the most serious penalty being a six-day suspension for her third absence on April
27, 2000.
Although employers enjoy a wide latitude of discretion in the formulation of work-related policies, rules and regulations,
their directives and the implementation of their policies must be fair and reasonable; at the very least, penalties must
be commensurate to the offense involved and to the degree of the infraction. Dismissal is the ultimate penalty that can
be imposed on an employee. Where a penalty less punitive may suffice, whatever missteps may be committed by labor
ought not to be visited with a consequence so severe for what is at stake is not merely the employee’s position but his
very livelihood and perhaps the life and subsistence of his family.
Century Iron Works Inc, Chua vs Banas
Banas: Inventory comptroller; duties are: (1) train newly hired warehouseman; (2) initiate analysis on the discrepancies
concerning records and inventories; (3) check and confirm warehouseman’s report; (4) check the accuracy of materials
requisition before issuance to the respective warehouseman at the jobsite; (5) monitor and maintain records; and (6)
recommend and initiate corrective or preventive action as may be warranted.
Century received letters of complaint from gas suppliers of alleged massive shoartage of empty gas cylinders. In the
investigation of Century, it found that Banas failed to make a report of such empty cylinders. It required Banas to explain
in 48 hrs why no disciplinary action should be taken against him and it also required him to attend a hearing on the matter.
The next month he was dismissed on grounds of loss of trust and confidence, and habitual and gross neglect of duty,
claiming he was a supervisory employee who was responsible for the lost cylinders.
Banas claims that he is merely an inventory clerk whose tasks were limited to conducting periodic and yearly inventories,
and submitting his findings to the personnel officer. He maintained that unlike a supervisory employee, he was not
required to post a bond and he did not have the authority to receive and/or release cylinders in the way that a
warehouseman does.
Complaint: ID
Issue: W/N Banas was ID? NO
Bañas was a mere rank-and-file employee. Century Iron’s issued numerous memoranda where Bañas was identified as
an inventory clerk. Moreover, Century Iron failed to present the Contract of Employment or the Appointment Letter, the
best evidence that would show that Bañas was an inventory comptroller. Since Bañas did not occupy a position of trust

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and confidence nor was he routinely in charge with the care and custody of Century Iron’s money or property, his
termination on the ground of loss of confidence was misplaced.
With regard to gross and habuitual neglect of duty, the evidence shows that Bañas committed numerous infractions in
his one year and 11-month stay in Century Iron. On different dates: He failed to check the right quantity of materials
subject of his inventory, Bañas went undertime, Bañas incurred an absence without asking for prior leave, he was warned
for failure to implement proper warehousing and housekeeping procedures, he failed to ensure sufficient supplies of
oxygen-acetylene gases during business hours, he was warned for failing to secure prior permission before going on
leave. Century Iron’s accounting department found out that Bañas made double and wrong entries in his inventory.
To our mind, such numerous infractions are sufficient to hold him grossly and habitually negligent. His repeated
negligence is not tolerable. The totality of infractions or the number of violations he committed during his employment
merits his dismissal. Moreover, gross and habitual negligence includes unauthorized absences and tardiness, as
well as gross inefficiency, negligence and carelessness. Fitness for continued employment cannot be
compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and independent of each
other.
Besides, the determination of who to keep in employment and who to dismiss for cause is one of Century Iron's
prerogatives. It would be the height of injustice if we force an employer to retain the services of an employee who does
not value his work.
FRAUD OR WILLFUL BREACH OF TRUST
Prudential Guarantee and Assurance Employee Labor Union, Vallota vs NLRC, Prudential Guarantee and
Assurance Inc (PGAI)
Vallota: Junior Programmer in the Electronic Data Processing Dept; elected Board of Directors of the Union.
PGAI conducted an on the spot security check in the IT department, beginning with the computer assigned to Vallota. fter
exploring the contents of all the folders and subfolders in the My Documents folder, Gutierrez apparently did not find
anything unusual with Vallotas computer and said Wala naman, saan dito? Retizos insisted, Nandyan yan, and took over
the inspection until she found a folder named MAA. She then exclaimed, Heto oh! Ano to? Bakit may MAA dito? Retizos
asked Vallota, Are you working for MAA? Vallota replied, Hindi po, MAA mutual life po yan na makikita po sa
internet. Gutierrez saved a copy of the contents of the MAA folder in a floppy disk.
Vallota was given a memo requiring him to explain in 72 hours why highly confidential files were stored in his computer.
He was also placed twice under preventive suspension for 30 days. Vallota replied to the charges.
Vallota was terminated on the ground of loss of trust and confidence.
Complaint: ID
Issue: W/N Vallota was ID?
The first question to be addressed is whether Vallota held a position of trust and confidence. There are 2 classes of
positions of trust. The first class consists of managerial employees. They are defined as those vested with the powers or
prerogatives to lay down management policies and to hire, transfer suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial actions. The second class consists of cashiers, auditors, property
custodians, etc. They are defined as those who in the normal and routine exercise of their functions, regularly handle
significant amounts of money or property.
Vallotas position as Junior Programmer is analogous to the second class of positions of trust and confidence.
Though he did not physically handle money or property, he became privy to confidential data or information by the nature
of his functions. At a time when the most sensitive of information is found not printed on paper but stored on hard drives
and servers, an employee who handles or has access to data in electronic form naturally becomes the unwilling recipient
of confidential information.
The next question is whether the act complained of justified the loss of trust and confidence of Vallotas employer so as to

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constitute a valid cause for dismissal. The act alleged to have caused the loss of trust and confidence of PGAI in Vallota
was the presence in his computers hard drive of a folder named MAA allegedly containing files with information on MAA
Mutual Life Philippines, a domestic corporation selling life insurance policies to the buying public, and files relating to
PGAIs internal affairs.
To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded
on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on
substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion; otherwise, the employee would
remain eternally at the mercy of the employer. Further, in order to constitute a just cause for dismissal, the act complained
of must be work-related and show that the employee concerned is unfit to continue working for the employer.
PJ Lhuiller Inc, Ludena (Area Operations Mgr) vs Velayo
Velayo: Accounting Clerk, vault custodian and cashier, also has function of electronically posting the day’s transactions in
the books of account (bookkeeper)
In 2007, Velayo was served with Show Cause Memo by Area Operations Mgr Ludena to explain in 48 hrs why no
disciplinary action should be taken against her for dishonesty, misappropriation, theft, or embezzlement of company funds
in violation of Item 11, Rule V of the Company Code of Conduct. She was preventively suspended pending investigation.
These charges were based on the Audit Findings conducted on Oct. 29, 2007, where the overage amount of ₱540 was
not reported immediately to the supervisor, not recorded at the end of that day.
Velayo’s reply: She was not able to report the overage since the Supervisor was on leave that day and she was still
tracing the overage; her failure to report was a simple mistake without intent to defraud her employer.
She claims she was afraid that Branch Manager Tuling would scold her, and that she kept the money for a long time in her
drawer and only decided to take it home after her search for the cause of the cash overage had proved futile
After investigation, PJ Lhuiller served her a Notice of Termination on ground of Serious Misconduct and Breach of Trust
Complaint: ID, separation pay, damages
Issue: W/N Velayo was ID? NO.
Velayo’s misconduct must be viewed in light of the strictly fiduciary nature of her position. In addition to its pawnshop
operations, the PJLI offers its "Pera Padala" cash remittance service whereby, for a fee or "sending charge," a customer
may remit money to a consignee through its network of pawnshop branches all over the country. On October 29, a
customer sent ₱500.00 through its branch in Capistrano, CDO City, and paid a remittance fee of ₱40. No corresponding
entry was made to recognize the cash receipt of ₱540 in the computerized accounting system of the PJLI. Velayo claimed
that she tried very hard but could not trace the source of her unexplained cash surplus of ₱540, but a branch audit
showed that it came from a "Pera Padala" customer.
There are two classes of corporate positions of trust: on the one hand are the managerial employees, on the other
hand are the fiduciary rank-and-file employees, such as cashiers, auditors, property custodians, or those who, in the
normal exercise of their functions, regularly handle significant amounts of money or property.
Velayo was an accounting clerk in 2003, but in 2007 when the incident happened, she performed the function of vault
custodian and cashier. In addition to her custodial duties, it was she who electronically posted the day’s transactions in the
books of accounts. It is plain to see then that when both functions are assigned to one person to perform, a very risky
situation of conflicting interests is created whereby the cashier can purloin the money in her custody and effectively cover
her tracks, at least temporarily, by simply not recording in the books the cash receipt she misappropriated. This is
commonly referred to as lapping of accounts. Only a most trusted clerk would be allowed to perform the two
functions, and she enjoyed this trust.
The series of willful misconduct committed by her in mishandling the unaccounted cash receipt exposes her as
unworthy of the utmost trust inherent in her position as branch cashier and vault custodian and bookkeeper.

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Granting arguendo that for some reason not due to her fault, she could not trace the source of the cash surplus, she well
knew the company’s policy that unexplained cash must be treated as miscellaneous income under the account "Other
Income," and that the same must be so recognized and recorded at the end of the day in the branch books or "operating
system." No such entry was made by her, resulting in unrecorded cash in her possession of ₱540, which the company
learned about only two months thereafter through a branch audit. When her Supervisor came back from LOA, she did not
tell her about the overage and she also refused to seek her help on what to do about it.
In order that an employer may invoke loss of trust and confidence in terminating an employee under Article 282(c) LC,
certain requirements must be complied with, namely: (1) the employee must be holding a position of trust and confidence;
and (2) there must be an act that would justify the loss of trust and confidence.
While loss of trust and confidence should be genuine, it does not require proof beyond reasonable doubt (only substantial
evidence), it being sufficient that there is some basis to believe that the employee concerned is responsible for the
misconduct and that the nature of the employee’s participation therein rendered him unworthy of trust and confidence
demanded by his position. PJ Lhuiller is fully justified in claiming loss of trust and confidence in Velayo.
Her actuations were willful and deliberate. A cashier who, through carelessness, lost a document evidencing a cash
receipt, and then willfully chose not to record the excess cash as miscellaneous income and instead took it home and
spent it on herself, and later repeatedly denied or concealed the cash overage when confronted, deserves to be
dismissed. As a general rule, employers are allowed a wider latitude of discretion in terminating the services of
employees who perform functions which by their nature require the employer’s full trust and confidence. Her intent is
immaterial, she was negligent and failed to meet the degree of care and fidelity demanded of her as cashier.
Casco vs NLRC, Capitol Medical Center, Clemente (President & CEO)
Capitol: Private Hospital

Casco: Initially in 1984, Staff Nurse of Recovery Room, promoted to Head Nurse of OB-Gyne Surgical Ward and Nurse
Supervisor of the Surgical Ward and finally promoted to Nurse Supervisor of the Operating Room in 2002.
Tasks as Nurse Supervisor of Operating Room: a.) responsible for the supervision and management of nurses and
services at the Operating and Recovery Room; b.) plan all nursing and exercise personnel management within the area,
make decisions when problems arise in the unit; c.) accountable for losses. equipment malfunction, breakage, patients
and personnel.
In 2006, she received from Capitol various equipment such as vaporizers, patient monitors and Pulse Oximeters or the
Operating Room. In 2008, a calibration of the OR’s vaporizers showed that several equipment were missing. Casco
filed an Incident Report of the missing vaporizers and 2 Mundray Monitors and 2 Pulse Oximeter.
Capitol issued a First Notice of Investigation for Casco’s gross negligence in connection with the loss of the hospital
equipment and required her to submit an explanation.
Explanation: She never neglected her duties in her 23 years with CMC, she verbally suggested to put surveillance
cameras in the ORs after the loss 17 sutures but only 2 were installed and only in the hallway of the OR; she could not get
anything out of the camera and asked her other colleagues to inquire if other hospitals are using the same machines and
to inform her if someone inquires/sells monitors/vaporizers; The incident was beyond her control
Capitol issued a Letter of Termination to Casco on ground of her gross negligence resulting to loss of equipment in the OR
since these machines were in her area of responsibility and she did not make control measures to secure them. Thus, the
Management has lost its trust and confidence in her as Supervisor.
Complaint: ID and damages
Issue: W/N Casco was ID? YES
As to neglect of Duty:
Neglect of duty, as a ground for dismissal, must be both gross and habitual. Gross negligence implies a want or absence
of or a failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of

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consequences without exerting any effort to avoid them. Habitual neglect implies repeated failure to perform one's duties
for a period of time, depending upon the circumstances.
CMC did not discharge its burden of proving by substantial evidence that the dismissal was for a valid and authorized
cause. Before Casco could be held liable for gross and habitual negligence of duty, CMC must clearly show that part of
her duty as a Nurse Supervisor was to be the custodian of hospital equipment and machineries within her area of
responsibility. Yet, there was no evidence submitted that substantially proved that CMC had entrusted to her the custody
of such property. Even the job description of a Nurse Supervisor did not include that of being the custodian of
hospital equipment and machines. Based on her job description, she would be accountable for losses, equipment
malfunction and breakages. Her being held accountable for losses and equipment malfunction did not automatically make
her the custodian thereof.
As to loss of trust and confidence:
Loss of trust and confidence as a valid ground for dismissal is premised on the fact that the employee holds a position
whose functions may only be performed by someone who enjoys the trust and confidence of the management. There are
2 classes of positions of trust. The first class consists of managerial employees. They are defined as those vested
with the powers or prerogatives to lay down management policies and to hire, transfer suspend, lay-off, recall, discharge,
assign or discipline employees or effectively recommend such managerial actions. The second class consists of cashiers,
auditors, property custodians, etc. They are defined as those who in the normal and routine exercise of their functions,
regularly handle significant amounts of money or property.
Casco, as Nurse Supervisor, indicated that she was a managerial employee, but was she validly dismissed? NO.
In the case of managerial employees (as opposed to Rank and File), it is sufficient that there is some basis for such
loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is
responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and
confidence demanded of his position.
Nonetheless, loss of trust and confidence as a ground of dismissal has never been intended to afford an occasion for
abuse because of its subjective nature. There must still be some basis to justify that Vasco was somehow
responsible for the loss of the equipment, and to show that her participation in the loss rendered her unworthy of the trust
and confidence demanded of her position as the Nurse Supervisor. As already discussed, she could not be made
accountable for the missing property for several reasons. Firstly, she was not vested with the responsibility of safekeeping
of the hospital equipment and machines. And, secondly, CMC did not adduce evidence showing that she had committed
willful and deliberate acts that led to the loss.
Thus, she is entitled to reinstatement and backwages.
Torres vs Rural Bank of San Juan, Jobel Chua et al
Torres: initially Personnel and Marketing Manager, then offered the position VP of RBSJ’s new department Allied Business
Ventures. Jobel Chua filled the vacancy
Torres was temporarily assigned as manager of RBSJ’s Domingo branch when Jacinto Figueroa resigned. Jacinto
requested Torres to sign a clearance pertaining to his accountabilities with RBSJI. When Torres declined, Jacinto threw
a fit and shouted foul invectives. To pacify him, Torres bargained to issue a clearance but only for Jacinto’s paid cash
advances and salary loan.
Subsequently, Jesus issued a memo to Torres requiring him to explain why no administrative action should be imposed on
him for his unauthorized issuance of a clearance to Jacinto whose accountabilities were yet to be audited. Jacinto was
later found to have unliquidated cash advances and was responsible for a questionable transaction involving ₱11M for
which RBSJI is being sued by a certain Actives Builders Manufacturing Corp. The memorandum stressed that the
clearance he issued effectively barred RBSJI from running after Jacinto.
He explained that the clearance was limited only to Jacinto’s paid cash advances and salary loan based on the receipts
presented by Lily Aguilar (Lily), the cashier of N. Domingo branch. He emphasized that he had no foreknowledge of
Jacinto’s unliquidated cash advances and questionable transactions and that the clearance did not extend to those
matters.

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After investigation, he was sent a Memorandum that he was terminated for violating the Company Code of Conduct and
Discipline (falsifying or misrepresenting persons or other company records, documents or papers) and that he was
unworthy of the trust and confidence demanded by his position.
Complaint: ID. He claims that it was RBSJ’s plotted to oust him. He claimed that he was deceived to accept a VP position,
which turned out to be a mere clerical and menial work, so RBSJ can install Jobel, the son of a major stockholder of
RBSJI, as Personnel and Marketing Manager. He alleged that he was cunningly assigned at N. Domingo branch so he
can be implicated in the anomalous transaction perpetrated by Jacinto. He claimed that he was harassed and forced to
resign which he refused and so he was sent a memo for clearing Jacinto’s accountabilities and was then terminated.
Issue: W/N Torres was ID? YES.
For dismissal premised on loss of trust and confidence to be valid, 2 requisites must concur, viz: (1) the employee
concerned must be holding a position of trust; and (2) the loss of trust must be based on willful breach of trust founded on
clearly established facts.
There is no arguing that he was part of the upper echelons of RBSJI’s management from whom greater fidelity to trust is
expected. It was part of his responsibilities to effect a smooth turn-over of pending transactions and to sign and approve
instructions within the limits assigned to the position under existing regulations.
As to the second requisite, RBSJ failed. The onus of submitting a copy of the clearance allegedly exonerating Jacinto
from all his accountabilities fell on RBSJ. It was the single and absolute evidence of the petitioner’s act that purportedly
kindled RCSJ’s loss of trust. With only sworn pleadings as proof of their opposite claims on the true contents of the
clearance, the Court is bound to apply the principle that the scales of justice should be tilted in favor of labor in case of
doubt in the evidence presented.
RBSJI also failed to substantiate its claim that Torres’ act estopped them from pursuing Jacinto for his standing
obligations. There is no proof that RBSJI attempted or at least considered to demand from Jacinto the payment of his
unpaid cash advances. Neither was RBSJI able to show that it filed a civil or criminal suit against Jacinto to make him
responsible for the alleged fraud.
More importantly, the complained act of Torres did not evince intentional breach of RBSJ’s trust and confidence.
Neither was he grossly negligent or unjustified in pursuing the course of action he took.
He was caught in the quandary of signing on the spot a standard employment clearance for the furious Jacinto sans any
information on his outstanding accountabilities, and refusing to so sign but risk alarming or scandalizing RBSJI, its
employees and clients. Contrary to RBSJ;s allegation, Torres did not concede to Jacinto’s demands. He was, in fact,
able to equalize two equally undesirable options by bargaining to instead clear Jacinto only of his settled financial
obligations after proper verification with branch cashier Lily. It was only after Lily confirmed Jacinto’s recorded payments
that he signed the clearance. The absence of an audit was precisely what impelled the petitioner to decline signing a
standard employment clearance to Jacinto and instead issue a different one pertaining only to his paid accountabilities.
Also, he did not commit an irregular or prohibited act. He did not falsify or misrepresent any company record as it was
officially confirmed by Lily that the items covered by the clearance were truly settled by Jacinto. Hence, there was no
factual basis in declaring that he violated Category B Grave Offense No. 1 of the Company Code of Conduct and
Discipline.
Thus, he is entitled to separation pay in lieu of reinstatement (due to animosity) plus backwages.
COMMISSION OF A CRIME
Sampaguita Garments Corp (SGC) vs NLRC, Santos
Santos: employee of SGC, attempted to bring out of the company premises, without permission, a piece of cloth
belonging to SGC.
She was dismissed on the ground of theft. SGC also filed a criminal case of theft where she was found guilty by MTC and
affirmed by RTC and CA and SC.

Page 81 of 87
Complaint: ID
NLRC found ID, ordered her reinstatement with backwages, which became final and executory.
Issue: W/N NLRC’s decision can be enforced? NO.
It is true that once a judgment has become final and executory, it can no longer be disturbed except only for the correction
of clerical errors or where supervening events render its execution impossible or unjust. Even so, we find, in light of the
subsequent developments, that the NLRC was not correct in sustaining the implementation of that decision.
The affirmance by RTC and CA of Santos’ conviction for theft is justification enough for the NLRC to exercise this
authority and suspend the execution of its decision. Such conviction, which was also upheld by this Court, is a
supervening cause that rendered unjust and inequitable the decision mandating the private respondent’s reinstatement,
and with back wages to boot.
Solgen agrees that reinstatement is no longer feasible in view of the subsequent conviction of Santos and the already
strained relationship. He suggests instead the grant of separation pay to Santos. We disagree. Even this award is not
justifiable because Santos was found guilty of a crime involving moral turpitude and so is disqualified from this
benefit under the ruling in PLDT v. NLRC. The same rationale exists for not enforcing award of back wages in favor of
the private respondent.
Her conviction of the crime of theft of property has affirmed the existence of a valid ground for her dismissal and
thus removed the justification for the administrative decision ordering her reinstatement with back wages. Nevertheless,
Sampaguita is still subject to sanction for its failure to accord her the right to an administrative investigation in conformity
with the procedural requirements of due process (1k for arbitrary dismissal).
ANALOGOUS
Cathedral School of Technology (CST), Sister Tambien vs NLRC, Vallejera
In 1982, Vallejera sought admission as an aspirant to the Congregation of the Religious of Virgin Mary (RVM). To observe
the life of a religious, she lived with the sisters of the congregation and received free board and lodging. In return for her
accommodations, she volunteered to assist as a library aide at CST, an educational institution run by the RVM
sisters. For this, she was given a monthly allowance of P200.00.
She had a change of heart and confessed to the sisters that she was no longer interested in becoming a nun. She
pleaded, however, to be allowed to continue living with the sisters for she had no other place to stay in, to which
request the sisters acceded and, in exchange therefor, she voluntarily continued to assist in the school library.
In 1988, she formally applied for and was appointed Library Aide. However, the sisters began receiving complaints from
students and employees about her difficult personality and sour disposition at work.
Before the opening of classes, she was summoned to the Office of the Directress by Sister Tambien, RVM, shortly after
the resignation of the school's Chief Librarian, Nebria, on account of irreconcilable differences with Vallejera, for the
purpose of clarifying the matter. Tambien also informed her of the negative reports regarding her frictional working
relationship with co-workers and students.
Vallejera reacted violently to Tambien’s remarks and angrily offered to resign, repeatedly saying, "OK, I will resign. I will
resign." She stormed out of the office in discourteous disregard and callous defiance of authority.
On separate occasions thereafter, CST sent at least 3 persons to talk to her and to settle her differences with her. She
remained adamant in her refusal to submit to authority. On June 15, Sister Apolinaria sent a letter formally informing her
that she had a month to look for another job as the school had decided to accept her resignation. She then filed a
complaint for illegal deduction and underpayment of salary, overtime pay and service incentive pay. She was prevented
from entering the school premises by one Sister Villamino in view of her dismissal from the service.

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Consequently, she amended her complaint to include illegal dismissal. Vallejera alleges that she was forced by CST
directress to tender her resignation but she refused. She was informed that her services would be terminated. She was
barred from entering the school due to the fact that she had already been dismissed. She requested that she be furnished
a copy of the termination paper but she was told that the letter of June 15 served that purpose.
Issue: W/N Vallejera was ID? There was just cause but no due process
EER must first be established before ruling on her dismissal. In this case, she was a regular employee of CST. Her
assignment as a library aide was necessary and/or desirable in the business of CST as an educational institution. Her
status, however, as a regular employee should only start from when she applied and was accepted as library aide. Also,
Sr. Tambien herself, in her letter dated June 15 admitted that she and complainant were employer and employee.
The reason for which her services were terminated, namely, her unreasonable behavior and unpleasant deportment in
dealing with the people she closely works with in the course of her employment, is analogous to the other "just causes"
enumerated under the Labor Code Art. 282.
CST’s averments on her disagreeable character -- "quarrelsome, bossy, unreasonable and very difficult to deal with" -- are
supported by the various testimonies of several co-employees and students of the school. In fact, her overbearing
personality caused the chief librarian to resign. Furthermore, the complaints about her objectionable behavior were
confirmed by her reproachable actuations during her meeting with Tambien directress on June 2, 1989, when Vallejera,
upon being advised of the need to improve her working relations with others, obstreperously reacted and
unceremoniously walked out on her superior, and arrogantly refused to subsequently clear up matters or to apologize
therefor.
The conduct she exhibited on that occasion smacks of sheer disrespect and defiance of authority and assumes the
proportion of serious misconduct or insubordination, any of which constitutes just cause for dismissal from
employment.
Procedural due process was not met: no hearing on the impending dismissal was conducted as would have afforded
Vallejera an opportunity to explain her side and to defend herself. True, CST notified her of the school's decision to
terminate her services. But notice alone, without the requisite hearing does not suffice. Thus, Vallejera is entitled to 1k
indemnity.
No separation pay, no backwages as equity.
Yrasuegui vs PAL
Yrasuegui was a former international flight steward of PAL. He stands 5’8” with a large body frame. The proper weight for
a man of his height and body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated by the
Cabin and Crew Administration Manual of PAL. The weight problem of Armando dates back to 1984. Until 1992, PAL
adopted several measures for him to lose weight. He was put on leaves without pay, removed on flight duty, he was
offered the services of the company-designated physician (but it did not work, he failed to report for weight checks), but he
remained overweight.
On November 13, 1992, PAL finally served him a Notice of Administrative Charge for violation of company standards on
weight requirements. He was given 10 days from receipt of the charge within which to file his answer and submit
controverting evidence.
In his answer he did not deny being overweight. What he claimed is that his violation had already been condoned by
PAL since no action has been taken by the company regarding his case since 1988. He also claimed that PAL
discriminated against him because the company has not been fair in treating the cabin crew members who are similarly
situated.
A clarificatory hearing was held where he manifested that he was undergoing a weight reduction program to lose at least 2
pounds per week so as to attain his ideal weight.
Armando was formally informed by PAL that due to his inability to attain his ideal weight, and considering the utmost
leniency extended to him which spanned a period covering a total of almost 5 years, his services were considered

Page 83 of 87
terminated effective immediately. His MR having been denied, he filed a complaint for illegal dismissal against PAL. The
LA ruled that he was illegally dismissed and that while the weight restrictions were reasonable, dismissal should not have
been meted as he can still perform other tasks. The NLRC affirmed. The CA reversed the NLRC saying that the weight
standards of PAL are meant to be a continuing qualification for an employee’s position.
Issue: W/N he was illegally dismissed?
Ruling: Affirmed
Is obesity a ground for dismissal under Article 282(e) of the Labor Code? YES. A reading of the weight standards of PAL
would lead to no other conclusion than that they constitute a continuing qualification of an employee in order to keep the
job. The dismissal of the employee would thus fall under Article 282(e) LC.
Armando claims that obesity is a physical abnormality and/or illness (not willful/voluntary). The evidence on record
militates against his claims that obesity is a disease. That he was able to reduce his weight from 1984 to 1992 clearly
shows that it is possible for him to lose weight given the proper attitude, determination, and self-discipline. Indeed, during
the clarificatory hearing he himself claimed that the issue is could I bring my weight down to ideal weight which is 172,
then the answer is yes. I can do it now.
Voluntariness basically means that the just cause is solely attributable to the employee without any external
force influencing or controlling his actions. This element runs through all just causes under Article 282, whether they
be in the nature of a wrongful action or omission.
Can his dismissal be predicated on the bona fide occupational qualification? YES.
Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin unless the
employer can show that sex, religion, or national origin is an actual qualification for performing the job. The qualification is
called a BFOQ, which is sanctioned by our laws.
First, the Constitution, the Labor Code, and RA No. 7277 (Magna Carta for Disabled Persons) contain provisions similar to
BFOQ. The test of reasonableness of the company policy is used because it is parallel to BFOQ. BFOQ is valid
provided it reflects an inherent quality reasonably necessary for satisfactory job performance. The LA, NLRC, and CA are
one in holding that the weight standards of PAL are reasonable. A common carrier is bound to observe extraordinary
diligence for the safety of the passengers it transports. In order to achieve this, it must necessarily rely on its employees,
most particularly the cabin flight deck crew who are on board the aircraft. The weight standards of PAL should be
viewed as imposing strict norms of discipline upon its employees.
The most important activity of the cabin crew is to care for the safety of passengers and the evacuation of the
aircraft when an emergency occurs. The biggest problem with an overweight cabin attendant is the possibility of impeding
passengers from evacuating the aircraft, should the occasion call for it.
Petitioner is also in estoppel. He does not dispute that the weight standards of PAL were made known to him prior to his
employment. In fact, never did he question the authority of PAL when he was repeatedly asked to trim down his weight.
Was he unduly discriminated against since other overweight employees were even promoted? NO. This is an
afterthought. There is nothing on the records which could support the finding of discriminatory treatment. Indeed, except
for pointing out the names of the supposed overweight cabin attendants, he miserably failed to indicate their respective
ideal weights; weights over their ideal weights; the periods they were allowed to fly despite their being overweight; the
particular flights assigned to them; the discriminating treatment they got from PAL; and other relevant data that could have
adequately established a case of discriminatory treatment by PAL.
To make his claim more believable, petitioner invokes the equal protection clause guaranty of the Constitution. However,
the Bill of Rights is not meant to be invoked against acts of private individuals. Private actions, no matter how egregious,
cannot violate the equal protection guarantee.
Although an award or order of reinstatement is self-executory and does not require a writ of execution, the option to
exercise actual reinstatement or payroll reinstatement belongs to the employer. It does not belong to the employee,
to the labor tribunals, or even to the courts.

Page 84 of 87
Normally, a legally dismissed employee is not entitled to separation pay. Exceptionally, separation pay is granted to a
legally dismissed employee as an act social justice, or based on equity. In both instances, it is required that the dismissal
(1) was not for serious misconduct; and (2) does not reflect on the moral character of the employee. Here, We grant his
separation pay equivalent to 1/2 month’s pay for every year of service. It should include regular allowances which he
might have been receiving.
Sampaguita Auto Transport Corp (SATC) vs NLRC, Sagad
In 2007, Sagad charged SATC, Adagio (President and Gen. Mgr.), Adagio (VP and Finance Mgr.) Olunan (Operations
Mgr) and Dimate (HRO Officer) with illegal dismissal and damages plus attorney's fees.
He alleged that SATC hired him as a regular bus driver, not as a probationary employee. He disowned his purported
signature on the contract of probationary Employment submitted in evidence by SATC was a forgery. He further alleged
that he was dismissed by the company for allegedly conniving with conductor Vitola in issuing tickets outside their
assigned route.
SATC countered that it employed Sagad as a probationary bus driver as evidenced by a probationary employment
contract from May 14, 2006 to Oct 14, 2006; he was duly informed of his corresponding duties and responsibilities. He
was further informed that during the probationary period, his attendance, performance and work attitude shall be
evaluated to determine whether he would qualify for regular employment. For this purpose, an evaluator, in the guise of a
passenger, was deployed on a company bus to observe the driver’s work performance and attitude.
The evaluator described Sagad’s manner of driving as "reckless driver, nakikipaggitgitan, nakikipaghabulan,
nagsasakay sa gitna ng kalsada, sumusubsob ang pasahero." Sagad disputed the evaluator’s observations. He claimed
that he could not have been driving as reported because his wife, who was pregnant, and one of his children were with
him on the bus. He admitted though that at one time, he chased an "Everlasting" bus to serve warning on its driver not to
block his bus when he was overtaking. He also admitted that once in a while, he sped up to make up for lost time in
making trips.
SATC requested conductors who had worked with Sagad to comment on his work. Conductors Hemoroz and Lucero
revealed that Sagad proposed that they cheat on the company by way of an unreported early bus trip. Dispatcher Castillo
even recommended the termination of Sagad’s employment. SATC also cited Sagad’s involvement in a hit-and-run
accident which it did not report to SATC along Commonwealth Avenue while on a trip. Upon conclusion of the evaluation,
SATC terminated Sagad’s employment for his failure to qualify as a regular employee.
LA dismissed the complaint since SATC was able to prove that Sagad failed to qualify as a regular employee.
NLRC reversed and held that he was illegally dismissed. It held that he was not a probationary employee as the company
failed to prove by substantial evidence the due execution of Sagad’s supposed probationary employment contract. It also
found the allegation of Sagad’s forged signature credible. It disregarded the alleged infractions as ground for termination
and said that his termination was not based on these, but on his alleged connivance with a conductor in defrauding SATC.
It awarded backwages and separation pay in lieu of reinstatement due to strained relations.
CA affirmed in toto. It agreed that the grounds the company relied upon for the termination of Sagad’s employment were
not among the causes for a valid dismissal enumerated under Article 282 LC.
Issues and Ruling:
W/N Sagad was a probationary employee? NO. He attained regular status at the time of his dismissal.
The submissions of the parties on the issue created a doubt on whether Sagad really entered into a probationary
employment contract with the company. The company failed to refute Sagad’s denial of his signature in the contract.
Even if we were to consider that Sagad went through a probationary period, he was retained even beyond the
expiration of his supposed probationary employment on Oct. 14, 2006. Sagad claimed that he was dismissed by the
company on Nov 5, after he was accused of conniving with conductor Vitola in issuing tickets outside their assigned route.
Under the law, "an employee who is allowed to work after a probationary period shall be considered a regular employee."

Page 85 of 87
Further, when the company questioned the payslips submitted by Sagad. it pointed out that Sagad presented only 1
payslip for the whole month of November 2006, which it reveals that Sagad continued working until the first week of
November 2006 and was paid his salary for at least one payroll period.
W/N his dismissal was illegal? NO.
First. While he disputed the evaluator’s negative observations, he admitted, however, that on one occasion, he chased an
"Everlasting" bus to warn its driver not to block him and that once in a while, he sped up to compensate for lost time in his
trips.
Second. We find no evidence that the other conductors had motive to lie about their impression of him as a bus driver.
Significantly, their statements validate Castillo’s own observation that he heard talks of Sagad’s orders to the
conductors for them to cheat on the company.
Further, there was Castillo’s evaluation rating Sagad’s work performance as poor on account of: (1) the low revenue of
Sagad’s bus; (2) his inability to make all his scheduled trips; and (3) his habit of bringing his wife with him on his trips.
Castillo also heard of talks of Sagad’s orders to the conductors to earn money in a questionable way.
Lastly, the company cites Sagad’s involvement in a hit-and-run incident while driving his assigned bus. Once more, he
denies the charge, claiming that it was not his bus which figured in the incident. Sagad’s stance fails to persuade us. The
Traffic Accident Investigation Report mentiones the plate number and body number of the bus that he was driving. The
report was corroborated by the sworn statements of the other parties to the accident.
The CA was incorrect in saying that the grounds for his dismissal were not among those listed in Art. 282 LC.
Article 282 of the Code provides:
Art. 282. An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing. [emphasis supplied]
The irregularities or infractions committed by Sagad constitute a serious misconduct or, at the very least, conduct
analogous to serious misconduct. His tendency to speed up during his trips, his reckless driving, his picking up
passengers in the middle of the road, his racing with other buses and his jostling for vantage positions do not speak well
of him as a bus driver. While he denies being informed of the duties and responsibilities of a driver, the requirement "to
obey traffic rules and regulations as well as the company policies. “to ensure the safety of the riding public as well as the
other vehicles and motorist” is so fundamental and so universal that any bus driver is expected to satisfy the
requirement whether or not he has been so informed.
The conductors’ comments and the dispatcher’s evaluation, together with the earlier on-board evaluation, all paint a
picture of a reckless driver who endangers the safety of his passengers, other motorists and the general public. Thus,
Sagad has become a liability rather than an asset to his employer. This calls to mind Castillo’s report on the low

Page 86 of 87
revenue of Sagad’s bus as validated by the company’s Daily Operation Reports from June to October 2006.
All told, we find substantial evidence supporting Sagad’s removal as a bus driver. Through his reckless driving and
his schemes to defraud the company, Sagad committed serious misconduct and breach of the trust and confidence of his
employer, which are just causes for his separation from the service.
W/N SATC complied with the twin notice? NO.
Even as we find a just cause for Sagad’s dismissal, SATC failed to comply with the two-notice rule. It failed to serve notice
of: (1) the particular acts for which Sagad was being dismissed and (2) his actual dismissal. The violation of Sagad's right
to procedural due process entitles him to an indemnity in the form of nominal damages. Considering the circumstances
in the present case, we deem it appropriate to award Sagad ₱30k.

Page 87 of 87

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EMPLOYER RECOGNITION

Pangilinan et al vs General Milling Corp. (GMC)

Article 280 LC comprehends 3 kinds of employees:

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Issue: W/N V and B are project employees?

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Gaps in employment in between projects?

San Miguel Corp vs NLRC, De Guzman

Issue: W/N De Guzman was a project employee? YES.

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In ALU-TUCP vs. NLRC, this Court discussed two types of projects:

Being a project employee, his termination was not tantamount to ID.

REGULAR EMPLOYEE DEINITION

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

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In Abasolo v. NLRC on the test of whether or not an employee is a regular employee:

Romares vs NLRC, PILMICO Foods Corp

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Issue: W/N Romares was a regular employee? YES.

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Audion Electric Co vs NLRC and Madolid

Issue: W/N Madolid was a project employee? NO.

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REPEATED RENEWAL OF CONTRACT

Maraguinot and Enero vs NLRC, Viva Films

Issue: W/N M and E are project employees? NO, regular

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1) There is a continuous rehiring of project employees even after cessation of a project;

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UST vs Samahang Manggagawa ng UST, Pontesor, Clacer, Buisa, Nazareth

Article 295 LC distinguishes project employment from regular employment as follows:

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Project employees? NO.

PROJECT EMPLOYEE DEFINITION

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

Completion bonus indicates that they were project employees? NO.

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William Uy Construction Corp and Uy vs Trinidad

Issue: W/N Trinidad is a project employee? YES, regardless of no. of years

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DM Consunji Corp vs Bello

Issue: W/N Bello is a project employee?

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Malicdem & Flores vs Marulas Industrial Corporation, Mancilla

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Omni Hauling Services, Lolita & Aniceto Franco vs Bon et al

Issue: W/N Bon et al were project employees? NO, illegal dismissal

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Innodata Knowledge Services Inc (IKSI) vs Inting et al

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Just/Authorized cause for termination? NONE.

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J & D.O. Aguilar Corp vs NLRC, Acedillo

Issue: W/N Acedillo is a project employee? NO

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CASUAL NATURE OF WORK

Hacienda Leddy/Gamboa vs Villegas

Issue: W/N Villegas is a regular employee? YES.

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