[G.R. No.

149985 May 5, 2006]

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC., Petitioner, vs.
ROSALINA C. ARCEO,*** Respondent.

FACTS:

May 1990 – ARCEO applied for the position of telephone operator with PLDT. She,
however, failed the pre-employment qualifying examination. Having failed the test,
ARCEO requested PLDT to allow her to work at the latter’s office even without pay.
PLDT agreed and assigned her to its commercial section where she was made to
perform various tasks like photocopying documents, sorting out telephone bills and
notices of disconnection, and other minor assignments and activities. After two weeks,
PLDT decided to pay her the minimum wage.
February 15, 1991 – PLDT saw no further need for ARCEO's services and decided to
fire her but, through the intervention of PLDT’s commercial section supervisor, she was
recommended for an on-the-job training on minor traffic work. When she failed to
assimilate traffic procedures, the company transferred her to auxiliary services, a minor
facility.
Subsequently, ARCEO took the pre-qualifying exams for the position of telephone
operator two more times but again failed in both attempts.
October 30, 1991 – PLDT discharged ARCEO from employment. She then filed a case
for illegal dismissal before the labor arbiter. On May 11, 1993, the arbiter ruled in her
favor. PLDT was ordered to reinstate ARCEO to her “former position or to an equivalent
position.”
June 9, 1993 – ARCEO was reinstated as casual employee with a minimum wage of
P106 per day. She was assigned to photocopy documents and sort out telephone bills.

CAUSE OF ACTION:
September 3, 1996 (more than three years after her reinstatement) – ARCEO filed a
complaint for unfair labor practice, underpayment of salary, underpayment of overtime
pay, holiday pay, rest day pay and other monetary claims. She alleged in her complaint
that, since her reinstatement, she had yet to be regularized and had yet to receive the
benefits due to a regular employee.

DECISION of the labor arbiter, NLRC, CA:

August 18, 1997 – The labor arbiter ruled that ARCEO was already qualified to become
a regular employee. He also found that PLDT denied her all the benefits and privileges
of a regular employee.
November 28, 1997 – The NLRC affirmed the decision of the labor arbiter finding
ARCEO eligible to become a regular employee.
June 29, 2001 – The CA affirmed the decision of the NLRC.

ISSUE:

Does the proviso in Art. 280 of the Labor Code which “regularizes” a casual employee
who has rendered at least one year of service subject to the condition that the
employment subsists or the position still exists?

HELD

Reinstatement to an “equivalent position” – PLDT’s argument that respondent’s position

has been abolished, if indeed true, does not preclude ARCEO’s becoming a regular
employee. The order to reinstate her also included the alternative to reinstate her to “a
position equivalent thereto.” Thus, PLDT can still “regularize” her in an equivalent
position.

PLDT failed to show position “no longer subsists” – Moreover, PLDT’s argument does
not hold water in the absence of proof that the activity in which ARCEO was engaged
(like photocopying of documents and sorting of telephone bills) no longer subsists.
Under Art. 280, any employee who has rendered at least one year of service “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.” For PLDT’s failure to show
that the activity undertaken by ARCEO has been discontinued, we are constrained to
confirm her “regularization” in that position.

Date of regularization (when entitled to benefits) – Considering that she has already
worked in PLDT for more than one year at the time she was reinstated, she should be
entitled to all the benefits of a regular employee from June 9, 1993 the day of her actual
reinstatement.