INNODATA PHILIPPINES INC.

VS QUEJADA-LOPEZ

FACTS:
Estrella Natividad and Jocelyn Quejada were employed by Innodata Ph.
Wich was engaged in the encoding/data conversion business
They were employed from March 4, 1997 until their separation on March
3, 1998.
They claimed that pursuant to Art 280 of the Labor Code they were
considered as regular employees. Hence, they filed this complain for
illegal dismissal.
Petitioner Company contends that respondents employment contracts
have expired for it had a fixed period of only 1 year. Hence, they were
terminated
LA ruled in favour of respondents and ordered that they be reinstated to
their former positions without the loss of their seniority rights
Petitioner corporation appealed to the NLRC which set aside LA. It
declared that the contracts were for a fixed term, hence dismissal was
valid

ISSUES:
WoN respondents were regular employees which consequently rendered
their dismissal illegal- YES
Regular employees pursuant to Sect 280 of the Labor Code and the fixed-
term contract was a crude attempt to circumvent the right of tenure of the
respondents

WoN the alleged fixed-term employment contracts issued by the company

were valid- NO
While the court recognizes the validity of fixed-term contracts, it
emphasized that if should circumstances show that they were imposed to
block the right of security of tenure, then they must be struck down
Like the case of Villanueva and Servidad, the employment contracts
provided for two periods
o Employment for a fixed term (1 year)
o Employment for a probationary period (should the employees fail to
meet a certain standard)
Aforementioned mentioned periods for the employment contract clearly
was intended to avoid the regularization of the employees
 The employer should not have been given the discretion to dismiss the
employees during the one year of employment for reasons other than
those just and authorized under the Labor Code
Employers may terminate their employees only for valid and just causes
which must be shown by clear and convincing evidence
The contract of employment is impressed with public interest.
Petitioner argues that the nature of their business is dependent on the
demands of their clients and hence, service of the employees too cannot
be ascertained
Being an inherent enterprise, it is the company who should absorb the risk
and this must not be used as an excuse to circumvent the Labor Laws.