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FABELA vs SAN MIGUEL CORPORATION Case Digest

[G.R. No. 150658 February 9, 2007]



NOELITO FABELA, MARCELO DELA CRUZ III, ROGELIO LASAT, HENRY
MALIWANAG, MANUEL DELOS SANTOS, and ROMMEL QUINES, Petitioners, vs.
SAN MIGUEL CORPORATION and ARMAN HICARTE, Respondents.

FACTS: Petitioners were hired by respondent San Miguel Corporation (SMC) as Relief
Salesmen for the Greater Manila Area (GMA) under separate but almost similarly
worded Contracts of Employment with Fixed Period. After having entered into
successive contracts of the same nature with SMC, the services of petitioners were
terminated after SMC no longer agreed to forge another contract with them.

Respondent SMC claimed that the hiring of petitioners was not intended to be
permanent, as the same was merely occasioned by the need to fill in a vacuum arising
from SMCs gradual transition to a new system of selling and delivering its products.
Respondents explained that SMC previously operated under the Route System, but
began implementing in 1993 the Pre-Selling System in which the salesmen under the
earlier system would be replaced by Accounts Specialists which called for upgraded
qualifications. While some of the qualified regular salesmen were readily upgraded to
the position of Accounts Specialist, respondents claimed that SMC still had to sell its
beer products using the conventional routing system during the transition stage, thus
giving rise to the need for temporary employees; and the members of the regular Route
Crew then existing were required to undergo a training program to determine whether
they possessed or could be trained for the necessary attitude and aptitude required of
an Accounts Specialist, hence, the hiring of petitioners and others for a fixed period, co-
terminus with the completion of the transition period and Training Program for all
prospective Accounts Specialists.

Claiming that they were illegally dismissed, petitioners filed complaints for illegal
dismissal against respondents.

ISSUE: Whether or not petitioners were validly hired for a fixed period.

HELD: The SC held that under article 280 of the Labor Code, there are two kinds of
regular employees, namely: (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 one year of service, whether continuous
or broken, with respect to the activity in which they are employed. Article 280 also
recognizes project employees, those whose employment has been fixed for a specific
project or undertaking.

Project employment is distinct from casual employment referred to in the second
paragraph of Article 280 for the proviso that any employee who has rendered at least
one year of service . . . shall be considered a regular employee does not apply to
project employees, but only to casual employees. Although Article 280 does not
expressly recognize employment for a fixed period, which is distinct from employment
which has been fixed for a specific project or undertaking, it has been clarified that
employment for a fixed period is not in itself illegal. Even if the duties of an employee
consist of activities usually necessary or desirable in the usual business of the
employer, it does not necessarily follow that the parties are forbidden from agreeing on
a period of time for the performance of such activities through a contract of employment
for a fixed term.

Unfortunately, respondents contention that there are fixed periods stated in the
contracts of employment does not lie. Brent instructs that a contract of employment
stipulating a fixed-term, even if clear as regards the existence of a period, is invalid if it
can be shown that the same was executed with the intention of circumventing security
of tenure, and should thus be ignored.

Indeed, substantial evidence exists in the present case showing that the subject
contracts were utilized to deprive petitioners of their security of tenure.The contract of
employment of petitioner Fabela, for instance, states that the transition period from the
Route System to the Pre-Selling System would be twelve (12) months from April 4,
1995. It bears noting, however, that petitioner Fabela, besides being hired again for
another fixed period of four (4) months after the lapse in April 1996 of the one-year
contract, had already been working for respondent SMC on a fixed-term basis as early
as 1992, or one year before respondent SMC even began its shift to the Pre-selling
System in 1993.

Thus, there is sufficient basis to believe that the shift of SMC to the Pre-Selling System
was not the real basis for the forging of fixed-term contracts of employment with
petitioners and that the periods were fixed only as a means to preclude petitioners from
acquiring security of tenure.

A fixed-term employment is valid only under certain circumstances, such as when the
employee himself insists upon the 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.

Petition is granted.

G.R. No. 70705 August 21, 1989
MOISES DE LEON, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and LA TONDEA INC.,
respondents.

Facts:
Petitioner was employed by private respondent La Tonde;a Inc. on December 11, 1981, at the
Maintenance Section of its Engineering Department in Tondo, Manila. His work consisted mainly of
painting company building and equipment, and other odd jobs relating to maintenance. He was paid on
a daily basis through petty cash vouchers.
In the early part of January, 1983, after a service of more than one (1) year, petitioner requested from
respondent company that he be included in the payroll of regular workers, instead of being paid through
petty cash vouchers. Private respondent's response to this request was to dismiss petitioner from his
employment on January 16, 1983. Having been refused reinstatement despite repeated demands,
petitioner filed a complaint for illegal dismissal, reinstatement and payment of backwages before the
Office of the Labor Arbiter of the then Ministry now Department of Labor and Employment.
Petitioner alleged that he was dismissed following his request to be treated as a regular employee; that
his work consisted of painting company buildings and maintenance chores like cleaning and operating
company equipment, assisting Emiliano Tanque Jr., a regular maintenance man; and that weeks after his
dismissal, he was re-hired by the respondent company indirectly through the Vitas-Magsaysay Village
Livelihood Council, a labor agency of respondent company, and was made to perform the tasks which he
used to do. Emiliano Tanque Jr. corroborated these averments of petitioner in his affidavit. On the
other hand, private respondent claimed that petitioner was not a regular employee but only a casual
worker hired allegedly only to paint a certain building in the company premises, and that his work as a
painter terminated upon the completion of the painting job.
Issue:
Whether or not a casual employee who perform odd jobs from time to time as assigned aside from the
performing his original task in for being employed for more one year can be considered as regular
employee?
Held:
The Court held, the law on the matter is Article 281 of the Labor Code which defines regular and casual
employment as follows:

Art. 281. Regular and casual employment. The provisions of a written agreement to the contrary
notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.

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

This provision reinforces the Constitutional mandate to protect the interest of labor. Its language
evidently manifests the intent to safeguard the tenurial interest of the worker who may be denied the
rights and benefits due a regular employee by virtue of lopsided agreements with the economically
powerful employer who can maneuver to keep an employee on a casual status for as long as
convenient. Thus, contrary agreements notwithstanding, 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. Not considered regular are the so-called "project employment" the completion or
termination of which is more or less determinable at the time of employment, such as those employed
in connection with a particular construction project and seasonal employment which by its nature is
only desirable for a limited period of time. However, any employee who has rendered at least one year
of service, whether continuous or intermittent, is deemed regular with respect to the activity he
performed and while such activity actually exists.

The primary standard, therefore, of determining a regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or trade of
the employer. The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer. 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 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. Hence, the
employment is also considered regular, but only with respect to such activity and while such activity
exists.

In the case at bar, the respondent company, which is engaged in the business of manufacture and
distillery of wines and liquors, claims that petitioner was contracted on a casual basis specifically to
paint a certain company building and that its completion rendered petitioner's employment terminated.
This may have been true at the beginning, and had it been shown that petitioner's activity was
exclusively limited to painting that certain building, respondent company's theory of casual employment
would have been worthy of consideration.

However, during petitioner's period of employment, the records reveal that the tasks assigned to him
included not only painting of company buildings, equipment and tools but also cleaning and oiling
machines, even operating a drilling machine, and other odd jobs assigned to him when he had no
painting job. A regular employee of respondent company, Emiliano Tanque Jr., attested in his affidavit
that petitioner worked with him as a maintenance man when there was no painting job.

Therefore, all things considered, the petitioners status of employment became regular hence private
respondent is ordered to reinstate petitioner as a regular maintenance man and to pay petitioner
backwages, ECOLA, and 13th Month Pay.

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