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January 18, 2012. G.R. No. 177498.* rise to a cause of action against the erring party.

e of action against the erring party.—We rule that distinction must be


STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI SHIP made between the perfection of the employment contract and the commencement of the
MANAGEMENT, petitioners, vs. SULPECIO MEDEQUILLO, JR., respondent. employer-employee relationship. The perfection of the contract, which in this case
coincided with the date of execution thereof, occurred when petitioner and respondent
Civil Law; Obligations; Novation; Novation is the extinguishment of an obligation agreed on the object and the cause, as well as the rest of the terms
by the substitution or change of the obligation by a subsequent one which extinguishes or 293
modifies the first, either by changing the object or principal conditions, or, by
substituting another in place of the debtor, or by subrogating a third person in the rights and conditions therein. The commencement of the employer-employee
of the creditor.—Novation is the extinguishment of an obligation by the substitution or relationship, as earlier discussed, would have taken place had petitioner been actually
change of the obligation by a subsequent one which extinguishes or modifies the first, deployed from the point of hire. Thus, even before the start of any employer-employee
either by changing the object or principal conditions, or, by substituting another in relationship, contemporaneous with the perfection of the employment contract was the
place of the debtor, or by subrogating a third person in the rights of the creditor. In birth of certain rights and obligations, the breach of which may give rise to a cause of
order for novation to take place, the concurrence of the following requisites is action against the erring party. Thus, if the reverse had happened, that is the seafarer
indispensable: 1. There must be a previous valid obligation, 2. There must be an failed or refused to be deployed as agreed upon, he would be liable for damages.
agreement of the parties concerned to a new contract, 3. There must be the Same; Same; Same; Penalties; Failure of the agency to deploy a worker within the
extinguishment of the old contract, and 4. There must be the validity of the new prescribed period without valid reasons shall be a cause for suspension or cancellation of
contract. license or fine. In addition, the agency shall return all documents at no cost to the
_______________ worker.Thirty (30) calendar days from the date of processing by the administration of
* SECOND DIVISION. the employment contracts of seafarers. —The POEA Rules and Regulations Governing
Overseas Employment dated 31 May 1991 provides for the consequence and penalty
292 against in case of non-deployment of the seafarer without any valid reason. It reads:
Section 4. Worker’s Deployment.—An agency shall deploy its recruits within the
Labor Law; Evidence; Substantial Evidence; Factual findings of labor officials, deployment period as indicated below: xxx b. Failure of the agency to deploy a
who are deemed to have acquired expertise in matters within their jurisdiction, are worker within the prescribed period without valid reasons shall be a cause
generally accorded not only respect but even finality by the courts when supported by for suspension or cancellation of license or fine. In addition, the agency shall
substantial evidence.—Equally settled is the rule that factual findings of labor officials, return all documents at no cost to the worker. (Emphasis and underscoring
who are deemed to have acquired expertise in matters within their jurisdiction, are supplied) The appellate court correctly ruled that the penalty of reprimand provided
generally accorded not only respect but even finality by the courts when supported by under Rule IV, Part VI of the POEA Rules and Regulations Governing the Recruitment
substantial evidence, i.e., the amount of relevant evidence which a reasonable mind and Employment of Land-based Overseas Workers is not applicable in this case. The
might accept as adequate to justify a conclusion. But these findings are not infallible. breach of contract happened on February 1992 and the law applicable at that time was
When there is a showing that they were arrived at arbitrarily or in disregard of the the 1991 POEA Rules and Regulations Governing Overseas Employment. The penalty
evidence on record, they may be examined by the courts. In this case, there was no for non-deployment as discussed is suspension or cancellation of license or fine.
showing of any arbitrariness on the part of the lower courts in their findings of facts. Same; Same; Same; Migrant Workers Act (R.A. No. 8042); The absence of the
Hence, we follow the settled rule. Philippine Overseas Employment Administration (POEA) Rules with regard to the
Same; Seafarers; Recruitment; Philippine Overseas Employment Administration payment of damages to the affected seafarer does not mean that the seafarer is precluded
(POEA) Standard Employment Contract; The Philippine Overseas Employment from claiming the same, the Supreme Court decreed the applicability of Section 10 of
Administration (POEA) Standard Employment Contract provides that employment shall Republic Act No. 8042 (Migrant Workers Act) which provides for money claims by reason
commence “upon the actual departure of the seafarer from the airport or seaport in the of a contract involving Filipino workers for
port of hire.”—The POEA Standard Employment Contract provides that employment 294
shall commence “upon the actual departure of the seafarer from the airport or seaport
in the port of hire.” We adhere to the terms and conditions of the contract so as to credit overseas deployment.—The POEA Rules Governing the Recruitment and
the valid prior stipulations of the parties before the controversy started. Else, the Employment of Seafarers do not provide for the award of damages to be given in favor
obligatory force of every contract will be useless. Parties are bound not only to the of the employees. The claim provided by the same law refers to a valid contractual claim
fulfillment of what has been expressly stipulated but also to all the consequences which, for compensation or benefits arising from employer-employee relationship or for any
according to their nature, may be in keeping with good faith, usage and law. personal injury, illness or death at levels provided for within the terms and conditions
Same; Same; Same; Employer-Employee Relationship; Even before the start of any of employment of seafarers. However, the absence of the POEA Rules with regard to the
employer-employee relationship, contemporaneous with the perfection of the employment payment of damages to the affected seafarer does not mean that the seafarer is
contract was the birth of certain rights and obligations, the breach of which may give precluded from claiming the same. The sanctions provided for non-deployment do not
end with the suspension or cancellation of license or fine and the return of all 2 Penned by Associate Justice Mariano C. Del Castillo (now a Member of this
documents at no cost to the worker. As earlier discussed, they do not forfend a seafarer Court) with Presiding Justice Ruben T. Reyes (former Member of this Court)
from instituting an action for damages against the employer or agency which has failed and Associate Justice Arcangelita Romilla Lontok, concurring. Rollo, pp. 38-
to deploy him. We thus decree the application of Section 10 of Republic Act No. 8042 54.
(Migrant Workers Act) which provides for money claims by reason of a contract 3 Id., at p. 53.
involving Filipino workers for oversea10. s deployment. The law provides: Sec. Money 4 Id., at pp. 134-139.
Claims.—Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive 296
jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of Assistant Engineer on board the vessel “Stolt Aspiration” for a period of nine (9)
any law or contract involving Filipino workers for overseas deployment including claims months;
for actual, moral, exemplary and other forms of damages. x x x (Underscoring supplied) He would be paid with a monthly basic salary of $808.00 and a fixed overtime
Civil Law; Damages; Actual Damages; One is entitled to an adequate pay of $404.00 or a total of $1,212.00 per month during the employment
compensation only for such pecuniary loss suffered by him as he has duly proved.— period commencing on 6 November 1991; 2.
Applying the rules on actual damages, Article 2199 of the New Civil Code provides that On 8 November 1991, he joined the vessel MV “Stolt Aspiration”; 3.
one is entitled to an adequate compensation only for such pecuniary loss suffered by On February 1992 or for nearly three (3) months of rendering service and while
him as he has duly proved. Respondent is thus liable to pay petitioner actual damages the vessel was at Batangas, he was ordered by the ship’s master to
in the form of the loss of nine (9) months’ worth of salary as provided in the contract. disembark the vessel and repatriated back to Manila for no reason or
This is but proper because of the non-deployment of respondent without just cause. explanation; 4.
Upon his return to Manila, he immediately proceeded to the petitioner’s office
PETITION for review on certiorari of a decision of the Court of Appeals. where he was transferred employment with another vessel named MV
The facts are stated in the opinion of the Court.295 “Stolt Pride” under the same terms and conditions of the First Contract;
5.
Rodello B. Ortiz for petitioners. On 23 April 1992, the Second Contract was noted and approved by the POEA;
Linsangan, Linsangan & Linsangan for respondent. 6.
The POEA, without knowledge that he was not deployed with the vessel,
PEREZ,J.: certified the Second Employment Contract on 18 September 1992. 7.
Before the Court is a Petition for Review on Certiorari1 of the Decision2 of the First Despite the commencement of the Second Contract on 21 April 1992, petitioners
Division of the Court of Appeals in CA-G.R. SP No. 91632 dated 31 January 2007, failed to deploy him with the vessel MV “Stolt Pride”; 8.
denying the petition for certiorari filed by Stolt-Nielsen Transportation Group, Inc. and He made a follow-up with the petitioner but the same refused to comply with the
Chung Gai Ship Management (petitioners) and affirming the Resolution of the National Second Employment Contract. 9.
Labor Relations Commission (NLRC). The dispositive portion of the assailed decision On 22 December 1994, he demanded for his passport, seaman’s book and other
reads: employment documents. However, he was only allowed to claim the said
“WHEREFORE, the petition is hereby DENIED. Accordingly, the assailed documents in exchange of his signing a document; 10.
Decision promulgated on February 28, 2003 and the Resolution dated July 27, 2005 He was constrained to sign the document involuntarily because without these
are AFFIRMED.”3 documents, he could not seek employment from other agencies. 11.

The facts as gathered by this Court follow: He prayed for actual, moral and exemplary damages as well as attorney’s fees for
On 6 March 1995, Sulpecio Madequillo (respondent) filed a complaint before the his illegal dismissal and in view of
Adjudication Office of the Philippine Overseas Employment Administration (POEA) 297
against the petitioners for illegal dismissal under a first contract and for failure to the Petitioners’ bad faith in not complying with the Second Contract.
deploy under a second contract. In his complaint-affidavit,4 respondent alleged that: The case was transferred to the Labor Arbiter of the DOLE upon the effectivity of
On 6 November 1991 (First Contract), he was hired by Stolt-Nielsen Marine the Migrant Workers and Overseas Filipinos Act of 1995.
Services, Inc on behalf of its principal Chung-Gai Ship Management of The parties were required to submit their respective position papers before the
Panama as Third 1. Labor Arbiter. However, petitioners failed to submit their respective pleadings despite
_______________ the opportunity given to them.5
1 Rule 45, Rule on Civil Procedure.
On 21 July 2000, Labor Arbiter Vicente R. Layawen rendered a judgment 6 finding 10 Id., at p. 64.
that the respondent was constructively dismissed by the petitioners. The dispositive 11 Id., at p. 68.
portion reads: 12 Id., at pp. 64-65.
“WHEREFORE, premises considered, judgment is hereby rendered, declaring the 13 Id., at p. 65.
respondents guilty of constructively dismissing the complainant by not honoring the
employment contract. Accordingly, respondents are hereby ordered jointly and 299
solidarily to pay complainant the following: spondent.14 It denied the claim of the petitioners that the monetary award should be
$12,537.00 or its peso equivalent at the time of payment.” 1.7 limited only to three (3) months for every year of the unexpired term of the contract. It
ruled that the factual incidents material to the case transpired within 1991-1992 or
The Labor Arbiter found the first contract entered into by and between the before the effectivity of Republic Act No. 8042 or the Migrant Workers and Overseas
complainant and the respondents to have been novated by the execution of the second Filipinos Act of 1995 which provides for such limitation.15
contract. In other words, respondents cannot be held liable for the first contract but are However, the NLRC upheld the reduction of the monetary award with respect to the
clearly and definitely liable for the breach of the second contract. 8 However, he ruled deletion of the overtime pay due to the non-deployment of the respondent.16
that there was no substantial evidence to grant the prayer for moral and exemplary The Partial Motion for Reconsideration filed by the petitioners was denied by the
damages.9 NLRC in its Resolution dated 27 July 2005.17
_______________ The petitioners filed a Petition for Certiorari before the Court of Appeals alleging
5 Id., at p. 61. grave abuse of discretion on the part of NLRC when it affirmed with modification the
6 Id., at pp. 59-62. ruling of the Labor Arbiter. They prayed that the Decision and Resolution promulgated
7 Id., at p. 62. by the NLRC be vacated and another one be issued dismissing the complaint of the
8 Id. respondent.
9 Id. Finding no grave abuse of discretion, the Court of Appeals AFFIRMED the Decision
of the labor tribunal.
298
The petitioners appealed the adverse decision before the National Labor Relations The Court’s Ruling
Commission assailing that they were denied due process, that the respondent cannot be
considered as dismissed from employment because he was not even deployed yet and The following are the assignment of errors presented before this Court:
the monetary award in favor of the respondent was exorbitant and not in accordance I.
with law.10 THE COURT A QUO ERRED IN FINDING THAT THE SECOND CONTRACT
On 28 February 2003, the NLRC affirmed with modification the Decision of the NOVATED THE FIRST CONTRACT.
Labor Arbiter. The dispositive portion reads: _______________
“WHEREFORE, premises considered, the decision under review is hereby, 14 Id., at p. 66.
MODIFIED BY DELETING the award of overtime pay in the total amount of Three 15 Id., at p. 67.
Thousand Six Hundred Thirty Six US Dollars (US $3,636.00). 16 Id.
In all other respects, the assailed decision so stands as, AFFIRMED.”11 17 Id., at p. 72.
Before the NLRC, the petitioners assailed that they were not properly notified of the 300
hearings that were conducted before the Labor Arbiter. They further alleged that after
the suspension of proceedings before the POEA, the only notice they received was a THERE WAS NO NOVATION OF THE FIRST CONTRACT BY THE SECOND
copy of the decision of the Labor Arbiter.12 CONTRACT; THE ALLEGATION OF ILLEGAL DISMISSAL UNDER THE
The NLRC ruled that records showed that attempts to serve the various notices of FIRST CONTRACT MUST BE RESOLVED SEPARATELY FROM THE
hearing were made on petitioners’ counsel on record but these failed on account of their ALLEGATION OF FAILURE TO DEPLOY UNDER THE SECOND
failure to furnish the Office of the Labor Arbiter a copy of any notice of change of CONTRACT. A.
address. There was also no evidence that a service of notice of change of address was THE ALLEGED ILLEGAL DISMISSAL UNDER THE FIRST CONTRACT
served on the POEA.13 TRANSPIRED MORE THAN THREE (3) YEARS AFTER THE CASE WAS
The NLRC upheld the finding of unjustified termination of contract for failure on FILED AND THEREFORE HIS CASE SHOULD HAVE BEEN DISMISSED
the part of the petitioners to present evidence that would justify their non-deployment FOR BEING BARRED BY PRESCRIPTION. B.
of the re- II.
_______________
THE COURT A QUO ERRED IN RULING THAT THERE WAS CONSTRUCTIVE 19 Philippine Savings Bank v. Sps. Maňalac, Jr., 496 Phil, 671, 686-687; 457 SCRA
DISMISSAL UNDER THE SECOND CONTRACT. 203, 217 (2005); Azolla Farms v. Court of Appeals, 484 Phil. 745, 754-755; 442 SCRA
IT IS LEGALLY IMPOSSIBLE TO HAVE CONSTRUCTIVE DISMISSAL 133, 143 (2004).
WHEN THE EMPLOYMENT HAS NOT YET COMMENCED. A. 20 Rollo, p. 61.
ASSUMING THERE WAS OMISSION UNDER THE SECOND CONTRACT,
PETITIONERS CAN ONLY BE FOUND AS HAVING FAILED IN DEPLOYING 302
PRIVATE RESPONDENT BUT WITH VALID REASON. B.
III. also reveal that the 2nd contract extinguished the first contract by changing its object
THE COURT A QUO ERRED IN FAILING TO FIND THAT EVEN ASSUMING or principal. These contracts were for overseas employment aboard different vessels.
THERE WAS BASIS FOR HOLDING PETITIONER LIABLE FOR “FAILURE TO The first contract was for employment aboard the MV “Stolt Aspiration” while the
DEPLOY” RESPONDENT, THE POEA RULES PENALIZES SUCH OMISSION WITH second contract involved working in another vessel, the MV “Stolt Pride.” Petitioners
A MERE “REPRIMAND.”18 and Madequillo, Jr. accepted the terms and conditions of the second contract. Contrary
to petitioners’ assertion, the first contract was a “previous valid contract” since it had
The petitioners contend that the first employment contract between them and the not yet been terminated at the time of Medequillo, Jr.’s repatriation to Manila. The
private respondent is different from and independent of the second contract legality of his dismissal had not yet been resolved with finality. Undoubtedly, he was
subsequently executed upon repatriation of respondent to Manila. still employed under the first contract when he negotiated with petitioners on the
We do not agree. second contract. As such, the NLRC correctly ruled that petitioners could only be held
_______________ liable under the second contract.”21
18 Id., at pp. 20-21.
We concur with the finding that there was a novation of the first employment
301 contract.
Novation is the extinguishment of an obligation by the substitution or change of the We reiterate once more and emphasize the ruling in Reyes v. National Labor
obligation by a subsequent one which extinguishes or modifies the first, either by Relations Commission,22 to wit:
changing the object or principal conditions, or, by substituting another in place of the “x x x [F]indings of quasi-judicial bodies like the NLRC, and affirmed by the Court of
debtor, or by subrogating a third person in the rights of the creditor. In order for Appeals in due course, are conclusive on this Court, which is not a trier of facts.
novation to take place, the concurrence of the following requisites is indispensable: xxxx
There must be a previous valid obligation, 1. x x x Findings of fact of administrative agencies and quasi-judicial bodies,
There must be an agreement of the parties concerned to a new contract, 2. which have acquired expertise because their jurisdiction is confined to
There must be the extinguishment of the old contract, and 3. specific matters, are generally accorded not only respect, but finality when
There must be the validity of the new contract. 4.19 affirmed by the Court of Appeals. Such findings deserve full respect and, without
justifiable reason, ought not to be altered, modified or reversed.” (Emphasis supplied)23
In its ruling, the Labor Arbiter clarified that novation had set in between the first
and second contract. To quote: With the finding that respondent “was still employed under the first contract when
“xxx [T]his office would like to make it clear that the first contract entered into by he negotiated with petitioners on the
and between the complainant and the respondents is deemed to have been novated by _______________
the execution of the second contract. In other words, respondents cannot be held liable 21 Id., at pp. 45-46.
for the first contract but are clearly and definitely liable for the breach of the second 22 G.R. No. 160233, 8 August 2007, 529 SCRA 487.
contract.”20 23 Id., at pp. 494 and 499.

This ruling was later affirmed by the Court of Appeals in its decision ruling that: 303
“Guided by the foregoing legal precepts, it is evident that novation took place in this second contract,”24 novation became an unavoidable conclusion.
particular case. The parties impliedly extinguished the first contract by agreeing to Equally settled is the rule that factual findings of labor officials, who are deemed to
enter into the second contract to placate Medequillo, Jr. who was unexpectedly have acquired expertise in matters within their jurisdiction, are generally accorded not
dismissed and repatriated to Manila. The second contract would not have been only respect but even finality by the courts when supported by substantial evidence, i.e.,
necessary if the petitioners abided by the terms and conditions of Madequillo, Jr.’s the amount of relevant evidence which a reasonable mind might accept as adequate to
employment under the first contract. The records justify a conclusion.25 But these findings are not infallible. When there is a showing
_______________ that they were arrived at arbitrarily or in disregard of the evidence on record, they may
be examined by the courts.26 In this case, there was no showing of any arbitrariness on 28 Id., at p. 48.
the part of the lower courts in their findings of facts. Hence, we follow the settled rule. 29 Article 1305, New Civil Code.
We need not dwell on the issue of prescription. It was settled by the Court of 30 Article 1306, New Civil Code.
Appeals with its ruling that recovery of damages under the first contract was already 31 Rollo, p. 48.
time-barred. Thus: 32 Article 1315, New Civil Code.
“Accordingly, the prescriptive period of three (3) years within which Medequillo Jr.
may initiate money claims under the 1st contract commenced on the date of his 305
repatriation. xxx The start of the three (3) year prescriptive period must therefore be not mean that the seafarer has no remedy in case of non-deployment without any valid
reckoned on February 1992, which by Medequillo Jr.’s own admission was the date of reason. Parenthetically, the contention of the petitioners of the alleged poor
his repatriation to Manila. It was at this point in time that Medequillo Jr.’s cause of performance of respondent while on board the first ship MV “Stolt Aspiration” cannot
action already accrued under the first contract. He had until February 1995 to pursue a be sustained to justify the non-deployment, for no evidence to prove the same was
case for illegal dismissal and damages arising from the 1st contract. With the filing of presented.33
his Complaint-Affidavit on March 6, 1995, which was clearly beyond We rule that distinction must be made between the perfection of the employment
_______________ contract and the commencement of the employer-employee relationship. The perfection
24 Rollo, p. 46. of the contract, which in this case coincided with the date of execution thereof, occurred
25 Prince Transport, Inc. v. Garcia, G.R. No. 167291, 12 January 2011, 639 SCRA when petitioner and respondent agreed on the object and the cause, as well as the rest
312, 324 citing Philippine Veterans Bank v. National Labor Relations Commission, G.R. of the terms and conditions therein. The commencement of the employer-employee
No. 188882, 30 March 2010, 617 SCRA 204. relationship, as earlier discussed, would have taken place had petitioner been actually
26 Id., at pp. 324-325 citing Faeldonia v. Tong Yak Groceries, G.R. No. 182499, 2 deployed from the point of hire. Thus, even before the start of any employer-employee
October 2009, 602 SCRA 677, 684. relationship, contemporaneous with the perfection of the employment contract was the
birth of certain rights and obligations, the breach of which may give rise to a cause of
304 action against the erring party. Thus, if the reverse had happened, that is the seafarer
failed or refused to be deployed as agreed upon, he would be liable for damages. 34
the prescriptive period, the cause of action under the 1st contract was already time- Further, we do not agree with the contention of the petitioners that the penalty is a
barred.”27 mere reprimand.
The POEA Rules and Regulations Governing Overseas Employment35 dated 31 May
The issue that proceeds from the fact of novation is the consequence of the non- 1991 provides for the consequence and penalty against in case of non-deployment of the
deployment of respondent. seafarer without any valid reason. It reads:
The petitioners argue that under the POEA Contract, actual deployment of the 4. “SectionWorker’s Deployment.—An agency shall deploy its recruits within the
seafarer is a suspensive condition for the commencement of the employment. 28 We deployment period as indicated below:
agree with petitioners on such point. However, even without actual deployment, the _______________
perfected contract gives rise to obligations on the part of petitioners. 33 Rollo, p. 50.
A contract is a meeting of minds between two persons whereby one binds himself, 34 Santiago v. CF Sharp Crew Management, Inc., G.R. No. 162419, 10 July 2007,
with respect to the other, to give something or to render some service. 29 The contracting 527 SCRA 165, 176.
parties may establish such stipulations, clauses, terms and conditions as they may 35 Section 4, par. (b), Rule II, Book III.
deem convenient, provided they are not contrary to law, morals, good customs, public
order, or public policy.30 306
The POEA Standard Employment Contract provides that employment shall
commence “upon the actual departure of the seafarer from the airport or seaport in the xxx
port of hire.”31 We adhere to the terms and conditions of the contract so as to credit the Thirty (30) calendar days from the date of processing by the administration of the
valid prior stipulations of the parties before the controversy started. Else, the obligatory employment contracts of seafarers. b.
force of every contract will be useless. Parties are bound not only to the fulfillment of Failure of the agency to deploy a worker within the prescribed period without
what has been expressly stipulated but also to all the consequences which, according to valid reasons shall be a cause for suspension or cancellation of license or
their nature, may be in keeping with good faith, usage and law.32 fine. In addition, the agency shall return all documents at no cost to the
Thus, even if by the standard contract employment commences only “upon actual worker.” (Emphasis and underscoring supplied)
departure of the seafarer,” this does
_______________ The appellate court correctly ruled that the penalty of reprimand 36 provided under
27 Rollo, pp. 47-48. Rule IV, Part VI of the POEA Rules and Regulations Governing the Recruitment and
Employment of Land-based Overseas Workers is not applicable in this case. The breach 308
of contract happened on February 1992 and the law applicable at that time was the but proper because of the non-deployment of respondent without just cause.
1991 POEA Rules and Regulations Governing Overseas Employment. The penalty for WHEREFORE, the appeal is DENIED. The 31 January 2007 Decision of the Court
non-deployment as discussed is suspension or cancellation of license or fine. of Appeals in CA-G.R. SP. No. 91632 is hereby AFFIRMED. The Petitioners are hereby
Now, the question to be dealt with is how will the seafarer be compensated by ordered to pay Sulpecio Medequillo, Jr., the award of actual damages equivalent to his
reason of the unreasonable non-deployment of the petitioners? salary for nine (9) months as provided by the Second Employment Contract.
The POEA Rules Governing the Recruitment and Employment of Seafarers do not SO ORDERED.
provide for the award of damages to be given in favor of the employees. The claim Carpio (Chairperson), Sereno, Reyes and Perlas-Bernabe,** JJ., concur.
provided by the same law refers to a valid contractual claim for compensation or
benefits arising from employer-employee relationship or for any personal injury, illness Petition denied, judgment affirmed.
or death at levels provided for within the terms and conditions of employment of
seafarers. However, the absence of the POEA Rules with regard to the payment of Notes.—Novation may either be extinctive or modificatory, much being dependent
damages to the affected seafarer does not mean that the seafarer is precluded from on the nature of the change and the intention of the parties. (Azarcon vs. People, 622
claiming the same. The sanctions provided for non-deployment do not end with the SCRA 341 [2010])
_______________ Article 291 of the Labor Code is the law governing the prescription of money claims
36 Section 1 (C) 4. Failure to deploy a worker within the prescribed period without of seafarers, a class of overseas contract workers; Article 291 prevails over Section 28 of
valid reason: the Standard Employment Contract for Seafarers which provides for claims to be
1st Offense – Reprimand. brought only within one year from the date of the seafarer’s return to the point of hire;
Section 28 insofar as it limits the prescriptive period within which the seafarers may
307 file their money claims, is hereby declared null and void. (Medline Management, Inc. vs.
suspension or cancellation of license or fine and the return of all documents at no cost to Roslinda, 630 SCRA 471 [2010])
the worker. As earlier discussed, they do not forfend a seafarer from instituting an ——o0o——
action for damages against the employer or agency which has failed to deploy him.37
We thus decree the application of Section 10 of Republic Act No. 8042 (Migrant
Workers Act) which provides for money claims by reason of a contract involving Filipino
workers for overseas deployment. The law provides:
10. “Sec.Money Claims.—Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days
after the filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages.
x x x” (Underscoring supplied)

Following the law, the claim is still cognizable by the labor arbiters of the NLRC
under the second phrase of the provision.
Applying the rules on actual damages, Article 2199 of the New Civil Code provides
that one is entitled to an adequate compensation only for such pecuniary loss suffered
by him as he has duly proved. Respondent is thus liable to pay petitioner actual
damages in the form of the loss of nine (9) months’ worth of salary as provided in the
contract.38 This is
_______________
37 Santiago v. CF Sharp Crew Management, Inc., supra note 34 at pp. 176-177.
38 In Legahi v. National Labor Relations Commission, 376 Phil. 557, 566; 318 SCRA
446, 457 (1999), we held: Petitioner’s dismissal without a valid cause constitute a
breach of contract. Consequently, he should only be paid the unexpired portion of his
employment contract.
G.R. No. 93666. April 22, 1991.* Earl Timothy Cone, a United States citizen, as sports consultant and assistant coach for
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioner General Milling Corporation (“GMC”).
petitioners, vs. HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and On 27 December 1989, petitioners GMC and Cone entered into a contract of
Employment, HON. BIENVENIDO E. LAGUESMA, in his capacity as Acting Secretary employment whereby the latter undertook to coach GMC’s basketball team.
of Labor and Employment, and BASKETBALL COACHES ASSOCIATION OF THE On 15 January 1990, the Board of Special Inquiry of the Commission on
PHILIPPINES, respondents. Immigration and Deportation approved petitioner Cone’s application for a change of
admission status from temporary visitor to prearranged employee.
Contracts; Provisions of applicable laws especially those relating to matters On 9 February 1990, petitioner GMC requested renewal of petitioner Cone’s alien
affected with public policy, are deemed written into contracts.—Neither can petitioners employment permit. GMC also requested that it be allowed to employ Cone as full-
validly claim that implementation of respondent Secretary’s decision would amount to fledged coach. The DOLE Regional Director, Luna Piezas, granted the request on 15
an impairment of the obligations of contracts. The provisions of the Labor Code and its February 1990.
Implementing Rules and Regulations requiring alien employment permits were in On 18 February 1990, Alien Employment Permit No. M-0290-3-881, valid until 25
existence long before petitioners entered into their contract of employment. It is firmly December 1990, was issued.
settled that provisions of applicable laws, especially provisions relating to matters Private respondent Basketball Coaches Association of the Philippines (“BCAP”)
affected with public policy, are deemed written into contracts. Private parties cannot appealed the issuance of said alien employment permit to the respondent Secretary of
constitutionally contract away the otherwise applicable provisions of law. Labor who, on 23 April 1990, issued a decision ordering cancellation of petitioner Cone’s
Labor Law; The Department of Labor is the agency vested with jurisdiction to employment permit on the ground that there was no showing that there is no person in
determine the question of availability of local workers.—Petitioners’ contention that the Philippines who is competent, able and willing to perform the services required nor
respondent Secretary of Labor should have deferred to the findings of Commission on that the hiring of petitioner Cone would redound to the national interest.
Immigration and Deportation as to the necessity of employing petitioner Cone, is again, Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental
bereft of legal basis. The Labor Code itself specifically empowers respondent Secretary Motions for Reconsideration but said Motions were denied by Acting Secretary of Labor
to make a determination as to the availability of the services of a “person in the Bienvenido E.
Philippines who is competent, able and willing at the time of application to perform the 217
services for which an alien is desired.” In short, the Department of Labor is the agency Laguesma in an Order dated 8 June 1990.
vested with jurisdiction to determine the question of availability of local workers. The Petitioners are now before the Court on a Petition for Certiorari, dated 14 June
constitutional validity of legal provisions granting such jurisdiction and authority and 1990, alleging that:
requiring proof of non-availability of local nationals able to carry out the duties of the
position involved, cannot be seriously questioned. 1. 1.respondent Secretary of Labor gravely abused his discretion when he revoked
petitioner Cone’s alien employment permit; and
PETITION for certiorari to review the decision of the Department of Labor and 2. 2.Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the Labor
Employment. Code is null and void as it is in violation of the enabling law as the Labor
Code does not empower respondent Secretary to determine if the employment
_______________ of an alien would redound to national interest.

* THIRD DIVISION. Deliberating on the present Petition for Certiorari, the Court considers that petitioners
have failed to show any grave abuse of discretion or any act without or in excess of
216 jurisdiction on the part of respondent Secretary of Labor in rendering his decision,
The facts are stated in the resolution of the Court. dated 23 April 1990, revoking petitioner Cone’s Alien Employment Permit.
Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners. The alleged failure to notify petitioners of the appeal filed by private respondent
Rodrigo, Cuevas & De Borja for respondent BCAP. BCAP was cured when petitioners were allowed to file their Motion for Reconsideration
RESOLUTION before respondent Secretary of Labor.1
Petitioner GMC’s claim that hiring of a foreign coach is an employer’s prerogative
FELICIANO, J.: has no legal basis at all. Under Article 40 of the Labor Code, an employer seeking
employment of an alien must first obtain an employment permit from the Department
of Labor. Petitioner GMC’s right to choose whom to employ is, of course, limited by the
On 1 May 1989, the National Capital Region of the Department of Labor and
statutory requirement of an alien employment permit.
Employment issued Alien Employment Permit No. M-0689-3-535 in favor of petitioner
Petitioners will not find solace in the equal protection clause of the Constitution. As 3 Article 40 of the Labor Code.
pointed out by the Solicitor-General, no comparison can be made between petitioner
Cone and Mr. Norman Black as the latter is “a long time resident of the country,” and 219
thus, not subject to the provisions of Article 40 of the Labor Code which apply only to
“non-resident aliens.” In any case, the term “non-resident alien” and its obverse 1. availability of any person in the Philippines who is competent and willing to do
“resident alien,” here must be given their technical connotation under our law on the job for which the services of the applicant are desired.
immigration. 2. (c)His assessment as to whether or not the employment of the applicant will
_______________ redound to the national interest;
3. (d)Admissibility of the alien as certified by the Commission on Immigration
1 De Leon v. Commission on Elections, 129 SCRA 117 (1984). and Deportation;
4. (e)The recommendation of the Board of Investments or other appropriate
218 government agencies if the applicant will be employed in preferred areas of
Neither can petitioners validly claim that implementation of respondent Secretary’s investments or in accordance with the imperative of economic development;
decision would amount to an impairment of the obligations of contracts. The provisions
of the Labor Code and its Implementing Rules and Regulations requiring alien
x x x x x x x x”
employment permits were in existence long before petitioners entered into their
(Italics supplied)
contract of employment. It is firmly settled that provisions of applicable laws, especially
provisions relating to matters affected with public policy, are deemed written into Article 40 of the Labor Code reads as follows:
contracts.2 Private parties cannot constitutionally contract away the otherwise “ART. 40. Employment permit of non-resident aliens.—Any alien seeking admission to
applicable provisions of law. the Philippines for employment purposes and any domestic or foreign employer who
Petitioners’ contention that respondent Secretary of Labor should have deferred to desires to engage an alien for employment in the Philippines shall obtain an
the findings of Commission on Immigration and Deportation as to the necessity of employment permit from the Department of Labor.
employing petitioner Cone, is, again, bereft of legal basis. The Labor Code itself The employment permit may be issued to a non-resident alien or to the applicant
specifically empowers respondent Secretary to make a determination as to the employer after a determination of the non-availability of a person in the Philippines
availability of the services of a “person in the Philippines who is competent, able and who is competent, able and willing at the time of application to perform the services for
willing at the time of application to perform the services for which an alien is which the alien is desired.
desired.”3 In short, the Department of Labor is the agency vested with jurisdiction to For an enterprise registered in preferred areas of investments, said employment
determine the question of availability of local workers. The constitutional validity of permit may be issued upon recommendation of the government agency charged with the
legal provisions granting such jurisdiction and authority and requiring proof of non- supervision of said registered enterprise.” (Italics supplied)
availability of local nationals able to carry out the duties of the position involved,
cannot be seriously questioned. Petitioners apparently suggest that the Secretary of Labor is not authorized to take into
Petitioners apparently also question the validity of the Implementing Rules and account the question of whether or not employment of an alien applicant would
Regulations, specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules, as “redound to the national interest” because Article 40 does not explicitly refer to such
imposing a condition not found in the Labor Code itself. Section 6 (c), Rule XIV, Book I assessment. This argument (which seems impliedly to concede that the relationship of
of the Implementing Rules, provides as follows: basketball coaching and the national interest is tenuous and unreal) is not persuasive.
“Section 6. Issuance of Employment Permit—The Secretary of Labor may issue an In the first place, the second paragraph of Article 40 says: “[t]he employment
employment permit to the applicant based on: permit may be issued to a non-resident alien or to the applicant employer after a
determination of the non-availability of a person in the Philippines who is competent,
1. (a)Compliance by the applicant and his employer with the requirements of able and willing at the time of application to perform the services for
Section 2 hereof; 220
2. (b)Report of the Bureau Director as to the availability or non- which the alien is desired.” The permissive language employed in the Labor Code
indicates that the authority granted involves the exercise of discretion on the part of the
_______________ issuing authority. In the second place, Article 12 of the Labor Code sets forth a
statement of objectives that the Secretary of Labor should, and indeed must, take into
2 E.g., Pakistan International Airways Corporation v. Hon. Blas F. Ople, et al., G.R. account in exercising his authority and jurisdiction granted by the Labor Code:
No. 61594, 28 September 1990; Commissioner of Internal Revenue v. United States “ART. 12. Statement of Objectives.—It is the policy of the State:
Lines Co., 5 SCRA 175 (1962).
1. a)To promote and maintain a state of full employment through improved
manpower training, allocation and utilization;x x x x x x x x x
2. c)To facilitate a free choice of available employment by persons seeking work in
conformity with the national interest;
3. d)To facilitate and regulate the movement of workers in conformity with the
national interest;
4. e)To regulate the employment of aliens, including the establishment of a
registration and/or work permit system;x x x x x x x x x”

Thus, we find petitioners’ arguments on the above points of constitutional law too
insubstantial to require further consideration.
Petitioners have very recently manifested to this Court that public respondent
Secretary of Labor has reversed his earlier decision and has issued an Employment
Permit to petitioner Cone. Petitioners seek to withdraw their Petition for Certiorari on
the ground that it has become moot and academic.
While ordinarily this Court would dismiss a petition that clearly appears to have
become moot and academic, the circumstances of this case and the nature of the
questions raised by petitioners are such that we do not feel justified in leaving those
questions unanswered.4 Moreover, assuming that an alien employment permit has in
fact been issued to petitioner Cone, the basis of the reversal by the Secretary of Labor of
his earlier decision does not appear in the record. If such reversal is based on some view
of constitutional law or labor law different from those here set out, then such
employment permit, if one has been issued, would appear open to serious legal
objections.
_______________

4 Cf. Javier v. Commission on Elections, 144 SCRA 194 (1986).

221
ACCORDINGLY, the Court Resolved to DISMISS the Petition for Certiorari for lack of
merit. Costs against petitioners.
Fernan (C.J., Chairman), Bidin and Davide, Jr., JJ., concur.
Gutierrez, Jr., J., In the result.

Petition dismissed.
Note.—The doctrine of sole and exclusive competence of the labor tribunal in cases
involving or originating from labor dispute has been constantly upheld by the Supreme
Court. (Filipinas Life Assurance Company, Inc. vs. Bleza, 139 SCRA 565.)

——o0o——
G.R. No. 128845. June 1, 2000.* Same; Same; If an employer accords employees the same position and rank, the
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), presumption is that these employees perform equal work.—The School contends that
petitioner, vs. HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of petitioner has not adduced evidence that local-hires perform work equal to that of
Labor and Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the foreign-hires. The Court finds this argument a little cavalier. If an employer accords
Acting Secretary of Labor and Employment; DR. BRIAN MACCAULEY in his capacity employees the same position and rank, the presumption is that these employees
as the Superintendent of International School-Manila; and INTERNATIONAL perform equal work. This presumption is borne by logic and human experience. If the
SCHOOL, INC., respondents. employer pays one employee less than the rest, it is not for that employee to explain
why he receives less or why the others receive more. That would be adding insult to
Labor Law; Constitutional Law; That public policy abhors inequality and injury. The employer has discriminated against that employee; it is for the employer to
discrimination is beyond contention.—That public policy abhors inequality and explain why the employee is treated unfairly.
discrimination is beyond contention. Our Constitution and laws reflect the policy Same; Same; The State has the right and duty to regulate the relations between
against these evils. The Constitution in the Article on Social Justice and Human Rights labor and capital.—The Constitution enjoins the State to “protect the rights of workers
exhorts Congress to “give highest priority to the enactment of measures that protect and promote their welfare,” “to afford labor full protection.” The State, therefore, has
and enhance the right of all people to human dignity, reduce social, economic, and the right and duty to regulate the relations between labor and capital. These relations
political inequalities.” The very broad Article 19 of the Civil Code requires every person, are not merely contractual but are so impressed with public interest that labor
“in the exercise of his rights and in the performance of his duties, [to] act with justice, contracts, collective bargaining agreements included, must yield to the common good.
give everyone his due, and observe honesty and good faith.” Should such contracts contain stipulations that are contrary to public policy, courts will
Same; Same; International law, which springs from general principles of law, not hesitate to strike down these stipulations.
likewise proscribes discrimination.—International law, which springs from general
principles of law, likewise proscribes discrimination. General principles of law include 15
principles of equity, i.e., the general principles of fairness and justice, based on the test
of what is reasonable. The Universal Declaration of Human Rights, the International SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
Covenant on Economic, Social, and Cultural Rights, the International Convention on
the Elimination of All Forms of Racial Discrimination, the Convention against The facts are stated in the opinion of the Court.
Discrimination in Education, the Convention (No. 111) Concerning Discrimination in Azcuna, Yorac, Sarmiento, Arroyo and Chua Law Offices for petitioner.
Respect of Employment and Occupation—all embody the general principle against Bernas Law Offices for private respondents.
discrimination, the very antithesis of fairness and justice. The Philippines, through its
Constitution, has incorporated this principle as part of its national laws. KAPUNAN, J.:
_______________
Receiving salaries less than their counterparts hired abroad, the local-hires of private
* FIRST DIVISION. respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires
are paid more than their colleagues in other schools is, of course, beside the point. The
14 point is that employees should be given equal pay for work of equal value. That is a
principle long honored in this jurisdiction. That is a principle that rests on fundamental
Same; Same; State directed to promote “equality of employment opportunities for notions of justice. That is the principle we uphold today.
all.”—The Constitution also directs the State to promote “equality of employment Private respondent International School, Inc. (the School, for short), pursuant to
opportunities for all.” Similarly, the Labor Code provides that the State shall “ensure Presidential Decree 732, is a domestic educational institution established primarily for
equal work opportunities regardless of sex, race or creed.” It would be an affront to both dependents of foreign diplomatic personnel and other temporary residents.1 To enable
the spirit and letter of these provisions if the State, in spite of its primordial obligation the School to continue carrying out its educational program and improve its standard of
to promote and ensure equal employment opportunities, closes its eyes to unequal and instruction, Section 2(c) of the same decree authorizes the School to
discriminatory terms and conditions of employment. employ its own teaching and management personnel selected by it either locally or
Same; Same; Discrimination, particularly in terms of wages, is frowned upon by abroad, from Philippine or other nationalities, such personnel being exempt from
the Labor Code.—Discrimination, particularly in terms of wages, is frowned upon by the otherwise applicable laws and regulations attending their employment, except laws
Labor Code. Article 135, for example, prohibits and penalizes the payment of lesser that have been or will be enacted for the protection of employees.
compensation to a female employee as against a male employee for work of equal value. Accordingly, the School hires both foreign and local teachers as members of its
Article 248 declares it an unfair labor practice for an employer to discriminate in regard faculty, classifying the same into two:
to wages in order to encourage or discourage membership in any labor organization. _______________
1 Issued on June 19, 1975 (Authorizing International School, Inc. to Donate Its Real question of whether foreign-hires should be included in the appropriate bargaining unit,
Properties to the Government of the Republic of the Philippines and Granting It eventually caused a deadlock between the parties.
Certain Rights). On September 7, 1995, petitioner filed a notice of strike. The failure of the National
Conciliation and Mediation Board to bring the parties to a compromise prompted the
16 Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute.
(1) foreign-hires and (2) local-hires. The School employs four tests to determine whether On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an
a faculty member should be classifled as a foreign-hire or a local hire: Order resolving the parity and representation issues in favor of the School. Then DOLE
Secretary Leonardo A. Quisumbing subsequently denied petitioner’s motion for
1. a.What is one’s domicile? reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this
2. b.Where is one’s home economy? Court.
3. c.To which country does one owe economic allegiance? Petitioner claims that the point-of-hire classification employed by the School is
4. d.Was the individual hired abroad specifically to work in the School and was discriminatory to Filipinos and that the grant of higher salaries to foreign-hires
the School responsible for bringing that individual to the Philippines?2 constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty members,
numbering 38 in all, with nationalities other than Filipino, who have been hired locally
Should the answer to any of these queries point to the Philippines, the faculty member
and classified as local hires.5 The Acting Secretary of Labor found that these
is classified as a local hire; otherwise, he or she is deemed a foreign-hire.
_______________
The School grants foreign-hires certain benefits not accorded local-hires. These
include housing, transportation, shipping costs, taxes, and home leave travel allowance.
Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-
3 Id., at. 324.
hires. The School justifies the difference on two “significant economic disadvantages”
4 Id., at. 8.
5 Id., at. 325. The breakdown is as follows:
foreign-hires have to endure, namely: (a) the “dislocation factor” and (b) limited tenure.
The School explains:
18
A foreign-hire would necessarily have to uproot himself from his home country, leave
non-Filipino local-hires received the same benefits as the Filipino local-hires:
his family and friends, and take the risk of deviating from a promising career path—all
The compensation package given to local-hires has been shown to apply to all,
for the purpose of pursuing his profession as an educator, but this time in a foreign land
regardless of race. Truth to tell, there are foreigners who have been hired locally and
The new foreign hire is faced with economic realities: decent abode for oneself and/or for
who are paid equally as Filipino local hires.6
one’s family, effective means of transportation allowance for the education of one’s
The Acting Secretary upheld the point-of-hire classification for the distinction in
children, adequate insurance against illness and death, and of course the primary
salary rates:
benefit of a basic salary/retirement compensation.
The principle “equal pay for equal work” does not find application in the present
Because of a limited tenure, the foreign hire is confronted again with the same
case. The international character of the School requires the hiring of foreign personnel
economic reality after his term: that he will eventually and inevitably return to his
to deal with different nationalities and different cultures, among the student
home country where he will have to confront the uncertainty of obtaining suitable
population.
employment after a long period in a foreign land.
We also take cognizance of the existence of a system of salaries and benefits
_______________ accorded to foreign hired personnel which system is universally recognized. We agree
that certain amenities have to be provided to these people in order to entice them to
render their services in the Philippines and in the process remain competitive in the
2 Rollo, p. 328.
international market.
Furthermore, we took note of the fact that foreign hires have limited contract of
17
employment unlike the local hires who enjoy security of tenure. To apply parity
The compensation scheme is simply the School’s adaptive measure to remain
therefore, in wages and other
competitive on an international level in terms of attracting competent professionals in
_______________
the field of international education.3
6 Id., at. 39.
When negotiations for a new collective bargaining agreement were held on June 1995,
petitioner International School Alliance of Educators, “a legitimate labor union and the
19
collective bargaining representative of all faculty members”4 of the School, contested the
benefits would also require parity in other terms and conditions of employment which
difference in salary rates between foreign and local-hires. This issue, as well as the
include the employment contract.
A perusal of the parties’ 1992-1995 CBA points us to the conditions and provisions for 10 M. DEFENSOR-SANTIAGO, International Law 75 (1999), citing Judge Hudson

salary and professional compensation wherein the parties agree as follows: in River Meuse Case, (1937) Ser. A/B No. 70.
All members of the bargaining unit shall be compensated only in accordance with 11 Ibid., citing Rann of Kutch Arbitration (India vs. Pakistan), 50 ILR 2 (1968).

Appendix C hereof provided that the Superintendent of the School has the discretion to 12 Adopted by the General Assembly of the United Nations on December 10, 1948.

recruit and hire, expatriate teachers from abroad, under terms and conditions that are Article 1 thereof states: “All human beings are born free and equal in dignity and
consistent with accepted international practice. Appendix C of said CBA further rights.” Article 2 provides, “1. Everyone is entitled to all the rights and freedoms set
provides: forth in this Declaration, without distinction of any kind, such as race, colour, sex,
The new salary schedule is deemed at equity with the Overseas Recruited Staff language, religion, political or other opinion, national or social origin, property, birth or
(OSRS) salary schedule. The 25% differential is reflective of the agreed value of system other status.”
displacement and contracted status of the OSRS as differentiated from the tenured 13 Adopted by the General of the United Nations in Resolution 2200 (XXI) of 16

status of Locally Recruited Staff (LRS). December 1966. Article 2 provides: “2. The States Parties to the present Covenant
undertake to guarantee that the rights enunciated in the present Covenant will be
To our mind, these provisions demonstrate the parties’ recognition of the difference exercised without discrimination of any kind as to race, colour, sex, language, religion,
in the status of two types of employees, hence, the difference in their salaries. political or other opinion, national or social origin, property, birth or other status.”
The Union cannot also invoke the equal protection clause to justify its claim of 14 Adopted by the General assembly of the United Nations in Resolution 2106 (XX)

parity. It is an established principle of constitutional law that the guarantee of equal 21 December 1965. Article 2 of the Convention states: “States Parties condemn racial
protection of the laws is not violated by legislation or private covenants based on discrimination and undertake to pursue by all appropriate means and without delay a
reasonable classification. A classification is reasonable if it is based on substantial policy of
distinctions and apply to all members of the same class. Verily, there is a substantial
distinction between foreign hires and local hires, the former enjoying only a limited 21
tenure, having no amenities of their own in the Philippines and have to be given a good nation in Education,15 the Convention (No. 111) Concerning Discrimination in Respect
compensation package in order to attract them to join the teaching faculty of the of Employment and Occupation16—all embody the general principle against
School.7 discrimination, the very antithesis of fairness and justice. The Philippines, through its
Constitution, has incorporated this principle as part of its national laws.
We cannot agree. In the workplace, where the relations between capital and labor are often skewed in
That public policy abhors inequality and discrimination is beyond contention. Our favor of capital, inequality and discrimination by the employer are all the more
Constitution and laws reflect the policy against these evils. The Constitution 8 in the reprehensible.
Article on Social Justice and Human Rights exhorts Congress to “give The Constitution17 specifically provides that labor is entitled to “humane conditions
_______________ of work.” These conditions are not restricted to the physical workplace—the factory, the
office or the field—but include as well the manner by which employers treat their
7 Id., at 38-39. employees.
8 In Section 1, Article XIII thereof. The Constitution18 also directs the State to promote “equality of employment
opportunities for all.” Similarly, the Labor Code 19 provides that the State shall “ensure
20 equal work opportunities regardless of sex, race or creed.” It would be an
highest priority to the enactment of measures that protect and enhance the right of all _______________
people to human dignity, reduce social, economic, and political inequalities.” The very
broad Article 19 of the Civil Code requires every person, “in the exercise of his rights eliminating racial discrimination in all its forms and promoting understanding
and in the performance of his duties, [to] act with justice, give everyone his due, and among all races x x x.”
observe honesty and good faith.” 15 Adopted at Paris, December 14, 1960. Under Article 3, the States Parties
International law, which springs from general principles of law, 9 likewise proscribes undertake, among others, “to abrogate any statutory provisions and any administrative
discrimination. General principles of law include principles of equity, 10 i.e., the general instructions and to discontinue any administrative practices which involve
principles of fairness and justice, based on the test of what is reasonable. 11 The discrimination in education.” Under Article 4, “The States Parties to this Convention
Universal Declaration of Human Rights,12 the International Covenant on Economic, undertake further more to formulate, develop and apply a national policy which, by
Social, and Cultural Rights,13 the International Convention on the Elimination of All methods appropriate to the circumstances and to national usage, will tend to promote
Forms of Racial Discrimination,14 the Convention against Discrimi- equality of opportunity and of treatment in the matter of education x x x.”
_______________ 16 Adopted by the General Conference of the International Labor Organization at

Geneva, June 25, 1958. Article 2 provides that, “Each Member for which this
9 Statute of the International Court of Justice, Art. 38. Convention is in force undertakes to declare and pursue a national policy designed to
promote, by methods appropriate to national condition and practice, equality of not for that employee to explain why he receives less or why the others receive more.
opportunity and treatment in respect of employment and occupation, with a view to That would be adding insult to injury.
eliminating any discrimination in respect thereof.” The employer has discriminated against that employee; it is for the employer to
17 In Article XIII, Section 3 thereof. explain why the employee is treated unfairly.
18 Id. The employer in this case has failed to discharge this burden. There is no evidence
19 In Article 3 thereof. here that foreign-hires perform 25% more efficiently or effectively than the local-hires.
Both groups have similar functions and responsibilities, which they perform under
22 similar working conditions.
State, in spite of its primordial obligation to promote and ensure equal employment The School cannot invoke the need to entice foreign-hires to leave their domicile to
opportunities, closes its eyes to unequal and discriminatory terms and conditions of rationalize the distinction in salary rates without violating the principle of equal work
employment.20 for equal pay.
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. “Salary” is defined in Black’s Law Dictionary (5th ed.) as “a reward or recompense for
Article 135, for example, prohibits and penalizes21 the payment of lesser compensation services performed.” Similarly, the Philippine Legal Encyclopedia states that “salary” is
to a female employee as against a male employee for work of equal value. Article 248 the
declares it an unfair labor practice for an employer to discriminate in regard to wages _______________
in order to encourage or discourage membership in any labor organization.
Notably, the International Covenant on Economic, Social, and Cultural 22 Indeed, the government employs this rule in fixing the compensation of
Rights, supra, in Article 7 thereof, provides: government employees. Thus, Republic Act No. 6758 (An Act Prescribing a Revised
The States Parties to the present Covenant recognize the right of everyone to the Compensation and Position Classification System in the Government and for Other
enjoyment of just and favorable conditions of work, which ensure, in particular: Purposes) declares it “the policy of the State to provide equal pay for substantially equal
work and to base differences in pay upon substantive differences in duties and
1. a.Remuneration which provides all workers, as a minimum, with: responsibilities, and qualification requirements of the positions. See also the Preamble
of Presidential Decree No. 985 (A Decree Revising the Position Classification and
1. i.Fair wages and equal remuneration for work of equal value without Compensation Systems in the National Government, and Integrating the same).
23 Rollo, p. 491.
distinction of any kind, in particular women being guaranteed conditions of
work not inferior to those enjoyed by men, with equal pay for equal work;
24
“[c]onsideration paid at regular intervals for the rendering of services.” In Songco v.
x x x. National Labor Relations Commission,24 we said that:
“salary” means a recompense or consideration made to a person for his pains or
The foregoing provisions impregnably institutionalize in this jurisdiction the long industry in another man’s business. Whether it be derived from “salarium,” or more
honored legal truism of “equal pay for equal work.” Persons who work with fancifully from “sal,” the pay of the Roman soldier, it carries with it the fundamental
substantially equal qualifications, skill, effort and responsibility, under similar idea of compensation for services rendered. (Emphasis supplied.)
_______________
While we recognize the need of the School to attract foreign-hires, salaries should not be
20 E.g., Article 135 of the Labor Code declares it unlawful for the employer to used as an enticement to the prejudice of local-hires. The local-hires perform the same
require, not only as a condition of employment, but also as a condition for services as foreign-hires and they ought to be paid the same salaries as the latter. For
the continuation of employment, that a woman shall not get married. the same reason, the “dislocation factor” and the foreign-hires’ limited tenure also
21 In relation to Articles 288 and 289 of the same Code.
cannot serve as valid bases for the distinction in salary rates. The dislocation factor and
limited tenure affecting foreign-hires are adequately compensated by certain benefits
23 accorded them which are not enjoyed by local-hires, such as housing, transportation,
conditions, should be paid similar salaries.22 This rule applies to the School, its shipping costs, taxes and home leave travel allowances.
“international character” notwithstanding. The Constitution enjoins the State to “protect the rights of workers and promote
The School contends that petitioner has not adduced evidence that local-hires their welfare,”25 “to afford labor full protection.”26 The State, therefore, has the right
perform work equal to that of foreignhires.23 The Court finds this argument a little and duty to regulate the relations between labor and capital. 27 These relations are not
cavalier. If an employer accords employees the same position and rank, the merely contractual but are so impressed with public interest that labor contracts,
presumption is that these employees perform equal work. This presumption is borne by collective bargaining agreements included, must yield to the common good. 28 Should
logic and human experience. If the employer pays one employee less than the rest, it is
such contracts contain stipulations that are contrary to public policy, courts will not latter. To include foreign-hires in a bargaining unit with local-hires would not assure
hesitate to strike down these stipulations. either group the exercise of their respective collective bargaining rights.
_______________ WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby
GRANTED IN PART. The Orders of the Secretary of Labor and Employment dated
24 183 SCRA 610 (1990). June 10, 1996 and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as
25 In Section 18, Article II thereof. they uphold the practice of respondent School of according foreign-hires higher salaries
26 In Section 3, Article XIII thereof. See also Article 3 of the Labor Code. than local-hires.
27 See Sec. 3, Article XIII, Constitution. Article 3 of the Labor Code. SO ORDERED.
28 Article 1700, Civil Code. Puno (Actg. Chairman) and Pardo, JJ., concur.
Davide, Jr. (C.J., Chairman), On official leave.
25 Ynares-Santiago, J., On leave.
In this case, we find the point-of-hire classification employed by respondent School to
justify the distinction in the salary rates of foreign-hires and local hires to be an invalid Petition granted in part. Orders of June 10, 1996 and March 19, 1997 reversed and
classification. There is no reasonable distinction between the services rendered by set aside.
foreign-hires and local-hires. The practice of the School of according higher salaries to Note.—The constitutional policy of providing full protection to labor is not intended
foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of to oppress or destroy management. (Capili vs. National Labor Relations
this Court. Commission, 270 SCRA 488 [1997])
We agree, however, that foreign-hires do not belong to the same bargaining unit as
the local-hires. ——o0o——
A bargaining unit is “a group of employees of a given employer, comprised of all or
less than all of the entire body of employees, consistent with equity to the employer,
indicate to be the best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law.” 29 The factors in determining the
appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine);
(2) affinity and unity of the employees’ interest, such as substantial similarity of work
and duties, or similarity of compensation and working conditions (Substantial Mutual
Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment
status.30 The basic test of an asserted bargaining unit’s acceptability is whether or not
it is fundamentally the combination which will best assure to all employees the exercise
of their collective bargaining rights.31
It does not appear that foreign-hires have indicated their intention to be grouped
together with local-hires for purposes of collective bargaining. The collective bargaining
history in the School also shows that these groups were always treated separately.
Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although
foreign-hires perform
_______________

29 Toyota Motor Philippines Corporation vs. Toyota Motor Philippines Federation

Labor Union and the Secretary of Labor and Employment, 268 SCRA 573 (1997); San
Miguel Corporation vs. Laguesma, 236 SCRA 595 (1994).
30 San Miguel Corporation vs. Laguesma, supra.
31 Belyca Corporation vs. Ferrer-Calleja, 168 SCRA 184 (1988).

26
similar functions under the same working conditions as the local-hires, foreign-hires
are accorded certain benefits not granted to local-hires. These benefits, such as housing,
transportation, shipping costs, taxes, and home leave travel allowance, are reasonably
related to their status as foreign-hires, and justify the exclusion of the former from the
G.R. No. 114337. September 29, 1995.* The facts are stated in the opinion of the Court.
NITTO ENTERPRISES, petitioner, vs. NATIONAL LABOR RELATIONS Sinforoso R. Pagunsan for petitioner.
COMMISSION, and ROBERTO CAPILI, respondents. Ma. Elena Enly B. Nazareta representative of private respondent.
656
Labor Law; Apprenticeship Agreements; Prior approval by the Department of
Labor and Employment of the proposed apprenticeship program is a condition sine qua KAPUNAN, J.:
non before an apprenticeship agreement can be validly entered into.—In the case at
bench, the apprenticeship agreement between petitioner and private respondent was This is a petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade decision1 rendered by public respondent National Labor Relations Commission, which
of “care maker/molder.” On the same date, an apprenticeship program was prepared by reversed the decision of the Labor Arbiter.
petitioner and submitted to the Department of Labor and Employment. However, the Briefly, the facts of the case are as follows:
apprenticeship Agreement was filed only on June 7, 1990. Notwithstanding the absence Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum
of ap- products, hired Roberto Capili sometime in May 1990 as an apprentice machinist,
_______________ molder and core maker as evidenced by an apprenticeship agreement 2 for a period of six
(6) months from May 28, 1990 to November 28, 1990 with a daily wage rate of P66.75
* FIRST DIVISION. which was 75% of the applicable minimum wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of
655 glass which he was working on, accidentally hit and injured the leg of an office
secretary who was treated at a nearby hospital.
proval by the Department of Labor and Employment, the apprenticeship Later that same day, after office hours, private respondent entered a workshop
agreement was enforced the day it was signed. Based on the evidence before us, within the office premises which was not his work station. There, he operated one of the
petitioner did not comply with the requirements of the law. It is mandated that power press machines without authority and in the process injured his left thumb.
apprenticeship agreements entered into by the employer and apprentice shall be Petitioner spent the amount of P1,023.04 to cover the medication of private respondent.
entered only in accordance with the apprenticeship program duly approved by the The following day, Roberto Capili was asked to resign in a letter3 which reads:
Minister of Labor and Employment. Prior approval by the Department of Labor and August 2, 1990
Employment of the proposed apprenticeship program is, therefore, a condition sine qua Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung
non before an apprenticeship agreement can be validly entered into. papaano gamitin and “TOOL” sa pagbuhat ng salamin, sarili niyang desisyon ang
Same; Same; Where the apprenticeship agreement has no force and effect, the paggamit ng tool at may disgrasya at nadamay pa ang isang sekretarya ng kompanya.
worker hired as apprentice should be considered as a regular employee.—Hence, since Sa araw ding ito limang (5) minuto ang nakalipas mula alas-singko ng hapon siya
the apprenticeship agreement between petitioner and private respondent has no force ay pumasok sa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at
and effect in the absence of a valid apprenticeship program duly approved by the kinalikot ang makina at nadisgrasya
DOLE, private respondent’s assertion that he was hired not as an apprentice but as a _______________
delivery boy (“kargador” or “pahinante”) deserves credence. He should rightly be
considered as a regular employee of petitioner as defined by Article 280 of the Labor 1 Rollo, pp. 12-15.
Code. 2 Records, p. 12.
Same; Dismissals; Due Process; The twin requirements of due process, substantive 3 Id., at 13.

and procedural, must be complied with before valid dismissal exists, otherwise the
dismissal becomes void.—There is an abundance of cases wherein the Court ruled that 657
the twin requirements of due process, substantive and procedural, must be complied niya ang kanyang sariling kamay.
with, before valid dismissal exists. Without which, the dismissal becomes void. The twin Nakagastos ang kompanya ng mga sumusunod:
requirements of notice and hearing constitute the essential elements of due process.
This simply means that the employer shall afford the worker ample opportunity to be Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang
heard and to defend himself with the assistance of his representative, if he so desires. matanggal ang tahi ng kanyang kamay.
Ample opportunity connotes every kind of assistance that management must accord the Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4
employee to enable him to prepare adequately for his defense including legal ng Agosto, 1990.
representation. Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang
kamay, pagkatapos ng siyam na araw mula ika-2 ng Agosto.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon, As correctly pointed out by the complainant, we cannot understand how an
kasama ng kanyang confirmasyon at pag-ayon na ang lahat ng nakasulat sa itaas ay apprenticeship agreement filed with the Department of Labor only on June 7, 1990
totoo. could be validly used by the Labor Arbiter as basis to conclude that the complainant
was hired by respondent as a plain ‘apprentice’ on May 8, 1990. Clearly, therefore, the
***************** complainant was respondent’s regular employee under Article 280 of the Labor Code, as
early as May 28, 1990, who thus enjoyed the security of tenure guaranteed in Section 3,
Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking Article XIII of our 1987 Constitution.
pagkakasala sa hindi pagsunod sa alintuntunin ng kompanya. The complaint being for illegal dismissal (among others) it then behooves upon
(Sgd.) Roberto Capili respondent, pursuant to Art. 277(b) and as ruled in
Roberto Capili _______________

On August 3, 1990 private respondent executed a Quitclaim and Release in favor of 5 Id., at 47-48.
petitioner for and in consideration of the sum of P1,912.79.4 6 Id., p. 47.
Three days after, or on August 6, 1990, private respondent formally filed before the 7 Rollo, pp. 14-15.

NLRC Arbitration Branch, National Capital Region a complaint for illegal dismissal
and payment of other monetary benefits. 659
On October 9, 1991, the Labor Arbiter rendered his decision finding the termination Edwin Gesulgon vs. NLRC, et al. (G.R. No. 90349, March 5, 1993, 3rd Div.,
of private respondent as valid and dismissing the money claim for lack of merit. The Feliciano, J.) to prove that the dismissal of complainant was for a valid cause. Absent
dispositive portion of the ruling reads: such proof, we cannot but rule that the complainant was illegally dismissed.8
WHEREFORE, premises considered, the termination is valid and for cause, and the
money claims dismissed for lack of merit. On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only
private respondent’s representative was present.
_______________ On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private respondent’s] Motion for Issuance of the
4 Id., at 14. Writ, you are hereby commanded to proceed to the premises of [petitioner] Nitto
Enterprises and Jovy Foster located at No. 1 74 Araneta Avenue, Potrero, Malabon,
658 Metro Manila or at any other places where their properties are located and effect the
The respondent however is ordered to pay the complainant the amount of P500.00 as reinstatement of herein [private respondent] to his work last performed or at the option
financial assistance. of the respondent by payroll reinstatement.
SO ORDERED.5 You are also to collect the amount of P122,690.85 representing his backwages as
called for in the dispositive portion, and turn over such amount to this Office for proper
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of disposition.
Roberto Capili was valid. First, private respondent who was hired as an apprentice
violated the terms of their agreement when he acted with gross negligence resulting in Petitioner filed a motion for reconsideration but the same was denied.
the injury not only to himself but also to his fellow worker. Second, private respondent Hence, the instant petition for certiorari.
had shown that “he does not have the proper attitude in employment particularly the The issues raised before us are the following:
handling of machines without authority and proper training.”6 I
On July 26, 1993, the National Labor Relations Commission issued an order
reversing the decision of the Labor Arbiter, the dispositive portion of which reads: WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE
WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby OF DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN
directed to reinstate complainant to his work last performed with backwages computed APPRENTICE.
from the time his wages were withheld up to the time he is actually reinstated. The
Arbiter of origin is hereby directed to further hear complainant’s money claims and to II
dispose them on the basis of law and evidence obtaining.
SO ORDERED.7 WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE
ABUSE OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT
The NLRC declared that private respondent was a regular employee of petitioner by ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING
ruling thus: THE SERVICE OF PRIVATE RESPONDENT.
_______________ Hence, since the apprenticeship agreement between petitioner and private
respondent has no force and effect in the absence of a valid apprenticeship program
8 Ibid. duly approved by the DOLE, private respondent’s assertion that he was hired not as an
apprentice but as a delivery boy (“kargador” or “pahinante”) deserves credence. He
660 should rightly be considered as a regular employee of petitioner as defined by Article
We find no merit in the petition. 280 of the Labor Code:
Petitioner assails the NLRC’s finding that private respondent Roberto Capili cannot ART. 280. Regular and Casual Employment.—The provisions of written agreement to
plainly be considered an apprentice since no apprenticeship program had yet been filed the contrary notwithstanding and regardless of the oral agreement of the parties, an
and approved at the time the agreement was executed. employment shall be deemed to be regular where the employee has been engaged to
Petitioner further insists that the mere signing of the apprenticeship agreement perform activities which are usually necessary or desirable in the usual business or trade
already established an employer-apprentice relationship. of the employer , except where the employment has been fixed for a specific project or
Petitioner’s argument is erroneous. undertaking the completion or termination of which has been determined at the time of
The law is clear on this matter. Article 61 of the Labor Code provides: the engagement of the employee or where the work or services to be performed in
Contents of apprenticeship agreement.—Apprenticeship agreements, including the seasonal in nature and the employment is for the duration of the season.
main rates of apprentices, shall conform to the rules issued by the Minister of Labor An employment shall be deemed to be casual if it is not covered by the preceding
and Employment. The period of apprenticeship shall not exceed six months. paragraph: Provided, That, any employee who has rendered at least one year of service,
Apprenticeship agreements providing for wage rates below the legal minimum wage, whether such service is continuous or broken, shall be considered a regular employee
which in no case shall start below 75% per cent of the applicable minimum wage, may with respect to the activity in which he is employed and his employment shall continue
be entered into only in accordance with apprenticeship program duly approved by the while such activity exists. (Emphasis supplied)
Minister of Labor and Employment . The Ministry shall develop standard model
programs of apprenticeship. (emphasis supplied) 662
and pursuant to the constitutional mandate to “protect the rights of workers and
In the case at bench, the apprenticeship agreement between petitioner and private promote their welfare.”9
respondent was executed on May 28, 1990 allegedly employing the latter as an Petitioner further argues that, there is a valid cause for the dismissal of private
apprentice in the trade of “care maker/molder.” On the same date, an apprenticeship respondent.
program was prepared by petitioner and submitted to the Department of Labor and There is an abundance of cases wherein the Court ruled that the twin requirements
Employment. However, the apprenticeship Agreement was filed only on June 7, 1990. of due process, substantive and procedural, must be complied with, before valid
Notwithstanding the absence of approval by the Department of Labor and Employment, dismissal exists.10 Without which, the dismissal becomes void.
the apprenticeship agreement was enforced the day it was signed. The twin requirements of notice and hearing constitute the essential elements of
Based on the evidence before us, petitioner did not comply with the requirements of due process. This simply means that the employer shall afford the worker ample
the law. It is mandated that apprenticeship agreements entered into by the employer opportunity to be heard and to defend himself with the assistance of his representative,
and apprentice shall be entered only in accordance with the apprenticeship program if he so desires.
duly approved by the Minister of Labor and Employment. Ample opportunity connotes every kind of assistance that management must accord
Prior approval by the Department of Labor and Employment of the proposed the employee to enable him to prepare adequately for his defense including legal
apprenticeship program is, therefore, a condition representation.11
661 As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC:12
sine qua non before an apprenticeship agreement can be validly entered into. The law requires that the employer must furnish the worker sought to be dismissed
The act of filing the proposed apprenticeship program with the Department of Labor with two (2) written notices before termination of employee can be legally effected: (1)
and Employment is a preliminary step towards its final approval and does not notice which apprises the employee of the particular acts or omissions for which his
instantaneously give rise to an employer-apprentice relationship. dismissal is sought; and (2) the subsequent notice which informs the employee of the
Article 57 of the Labor Code provides that the State aims to “establish a national employer’s decision to dismiss him (Sec. 13, BP 130; Sec. 2-6 Rule XIV, Book V, Rules
apprenticeship program through the participation of employers, workers and and Regulations Implementing the Labor Code as amended). Failure to comply with the
government and non-government agencies” and “to establish apprenticeship standards requirements taints the dismissal with illegality. This procedure is mandatory; in the
for the protection of apprentices.” To translate such objectives into existence, prior absence of which, any judgment reached by management is void and inexistent
approval of the DOLE to any apprenticeship program has to be secured as a (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National Service Corp. vs. NLRC, 168
condition sine qua non before any such apprenticeship agreement can be fully enforced. SCRA 122; Ruffy vs. NLRC, 182 SCRA 365 [1990]).
The role of the DOLE in apprenticeship programs and agreements cannot be debased.
_______________
9 Sec. 18, Art. II, The 1987 Constitution of the Republic of the Philippines.
10 Century Textile Mills, Inc. v. NLRC, 161 SCRA 528 (1988); Gold City Integrated
Port Services, Inc. v. NLRC, 189 SCRA 811 (1990); Kwikway Engineering Works v.
NLRC, 195 SCRA 526 (1991).
11 Abiera v. National Labor Relations Commission, 215 SCRA 476 (1992).
12 210 SCRA 277 (1992).

663
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter
only three days after he was made to sign a Quitclaim, a clear indication that such
resignation was not voluntary and deliberate.
Private respondent averred that he was actually employed by petitioner as a
delivery boy (“kargador” or “pahinante”).
He further asserted that petitioner “strong-armed” him into signing the
aforementioned resignation letter and quitclaim without explaining to him the contents
thereof. Petitioner made it clear to him that anyway, he did not have a choice. 13
Petitioner cannot disguise the summary dismissal of private respondent by
orchestrating the latter’s alleged resignation and subsequent execution of a Quitclaim
and Release. A judicious examination of both events belies any spontaneity on private
respondent’s part.
WHEREFORE, finding no abuse of discretion committed by public respondent
National Labor Relations Commission, the appealed decision is hereby AFFIRMED.
SO ORDERED.
Padilla (Chairman), Davide, Jr., Bellosillo and Hermosisima, Jr., JJ., concur.

Judgment affirmed.
Notes.—An employee who is forced to resign is considered to have been illegally
dismissed. (Guatson International Travel and Tours, Inc. vs. National Labor Relations
Commission, 230 SCRA 815 [1994])
In job contracting, the principal is jointly and severally liable with the contractor
and insolvency or unwillingness to pay by the contractor or direct employer is not a
prerequisite for the joint and severally liability of the principal. (Development Bank of
the Philippines vs. National Labor Relations Commission, 233 SCRA 250 [1994])

——o0o——
January 26, 2011. G.R. No. 187320.* _______________
ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, petitioners, vs. APRILITO R.
SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMOITE, and JOSEPH S. SAGUN, 1 Rollo, pp. 12-34; filed pursuant to Rule 45 of the Rules of Court.
respondents. 2 Id., at pp. 42-63; penned by Associate Justice Pampio A. Abarintos, and concurred
in by Associate Justice Edgardo F. Sundiam and Associate Justice Sesinando E. Villon.
Labor Law; Illegal Dismissals; When they were dismissed without just or 3 Id., at pp. 65-66.
authorized cause, without notice, and without the opportunity to be heard, their 4 Aprilito R. Sebolino, Khim V. Costales, Alvin V. Almoite and Joseph S. Sagun v.
dismissal was illegal under the law.—This reality is highlighted by the CA finding that National Labor Relations Commission, Atlanta Industries, Inc. and/or Robert Chan.
the respondents occupied positions such as machine operator, scaleman and extruder
operator—tasks that are usually necessary and desirable in Atlanta’s usual business or 682
trade as manufacturer of plastic building materials. These tasks and their nature Joseph S. Sagun, Agosto D. Zaño, Domingo S. Alegria, Jr., Ronie Ramos, Edgar
characterized the four as regular employees under Article 280 of the Labor Code. Thus, Villagomez, Melvin Pedregoza, Teofanes B. Chiong, Jr., Leonardo L. dela Cruz, Arnold
when they were dismissed without just or authorized cause, without notice, and without A. Magalang, and Saturnino M. Mabanag filed several complaints for illegal dismissal,
the opportunity to be heard, their dismissal was illegal under the law. regularization, underpayment, nonpayment of wages and other money claims, as well
Same; Regular Employees; With the expiration of the first agreement and the as claims for moral and exemplary damages and attorney’s fees against the petitioners
retention of the employees, Atlanta recognized the completion of their training and their Atlanta Industries, Inc. (Atlanta) and its President and Chief Operating Officer Robert
acquisition of a regular employee status.—Even if we recognize the company’s need to Chan. Atlanta is a domestic corporation engaged in the manufacture of steel pipes.
train its employees through apprenticeship, we can only consider the first The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig,
apprenticeship agreement for the purpose. With the expiration of the but were later transferred to Labor Arbiter Dominador B. Medroso, Jr.
_______________ The complainants alleged that they had attained regular status as they were
allowed to work with Atlanta for more than six (6) months from the start of a purported
* THIRD DIVISION. apprenticeship agreement between them and the company. They claimed that they
were illegally dismissed when the apprenticeship agreement expired.
681 In defense, Atlanta and Chan argued that the workers were not entitled to
regularization and to their money claims because they were engaged as apprentices
first agreement and the retention of the employees, Atlanta had, to all intents and under a government-approved apprenticeship program. The company offered to hire
purposes, recognized the completion of their training and their acquisition of a regular them as regular employees in the event vacancies for regular positions occur in the
employee status. To foist upon them the second apprenticeship agreement for a second section of the plant where they had trained. They also claimed that their names did not
skill which was not even mentioned in the agreement itself, is a violation of the Labor appear in the list of employees (Master List)5 prior to their engagement as apprentices.
Code’s implementing rules and is an act manifestly unfair to the employees, to say the On May 24, 2005, dela Cruz, Magalang, Zaño and Chiong executed a Pagtalikod at
least. Pagwawalang Saysay before Labor Arbiter Cajilig.
_______________
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals. 5 Rollo, pp. 192-216.
The facts are stated in the opinion of the Court.
Dela Rosa & Nograles for petitioners. 683
Sentro ng Alternatibong Lingap Panligal [Saligan] for respondents. The Compulsory Arbitration Rulings
On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to
BRION,J.: dela Cruz, Magalang, Zaño and Chiong, but found the termination of service of the
For resolution is the petition for review on certiorari1 assailing the decision2 and the remaining nine to be illegal.6 Consequently, the arbiter awarded the dismissed workers
resolution3 of the Court of Appeals (CA) rendered on November 4, 2008 and March 25, backwages, wage differentials, holiday pay and service incentive leave pay amounting
2009, respectively, in CA-G.R. SP. No. 99340.4 to P1,389,044.57 in the aggregate.
Atlanta appealed to the National Labor Relations Commission (NLRC). In the
The Antecedents meantime, or on October 10, 2006, Ramos, Alegria, Villagomez, Costales and Almoite
allegedly entered into a compromise agreement with Atlanta. 7The agreement provided
The facts are summarized below. that except for Ramos, Atlanta agreed to pay the workers a specified amount as
In the months of February and March 2005, complainants Aprilito R. Sebolino, settlement, and to acknowledge them at the same time as regular employees.
Khim V. Costales, Alvin V. Almoite,
On December 29, 2006,8 the NLRC rendered a decision, on appeal, modifying the 685
ruling of the labor arbiter, as follows: (1) withdrawing the illegal dismissal finding with The positions occupied by the respondents—machine operator, extruder operator
respect to Sagun, Mabanag, Sebolino and Pedregoza; (2) affirming the dismissal of the and scaleman—are usually necessary and desirable in the manufacture of plastic
complaints of dela Cruz, Zaño, Magalang and Chiong; (3) approving the compromise building materials, the company’s main business. Costales, Almoite, Sebolino and
agreement entered into by Costales, Ramos, Villagomez, Almoite and Alegria, and (4) Sagun were, therefore, regular employees whose dismissals were illegal for lack of a
denying all other claims. just or authorized cause and notice. 3.
Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the decision, The compromise agreement entered into by Costales and Almoite, together with
but the NLRC denied the motion in its March 30, 2007 9 resolution. The four then Ramos, Villagomez and Alegria, was not binding on Costales and Almoite because they
sought relief from the CA through a petition for certiorari under Rule 65 of the Rules of did not sign the agreement. 4.
Court. They charged that the NLRC committed grave abuse of discretion in: (1) failing The petitioners themselves admitted that Costales and Almoite were initially
to recognize their prior employment with Atlanta; (2) declaring the second planned to be a part of the compromise agreement, but their employment has been
_______________ regularized as early as January 11, 2006; hence, the company did not pursue their
inclusion in the compromise agreement.12
6 Id., at pp. 89-99; Petition, Annex “N.” The CA faulted the NLRC for failing to appreciate the evidence regarding the
7 CA Rollo, pp. 286-287. respondents’ prior employment with Atlanta. The NLRC recognized the prior
8 Rollo, pp. 100-110; Petition, Annex “O.” employment of Costales and Almoite on Atlanta’s monthly report for December 2003 for
9 Id., at pp. 115-118; Petition, Annex “P.” the CPS Department/Section dated January 6, 2004.13 This record shows that Costales
and Almoite were assigned to the company’s first shift from 7:00 a.m. to 3:00 p.m. The
684 NLRC ignored Sebolino and Sagun’s prior employment under the company’s Production
apprenticeship agreement valid; (3) holding that the dismissal of Sagun, Mabanag, and Work Schedule for March 7 to 12, 2005 dated March 3, 2004, 14 as they had been
Sebolino and Melvin Pedregoza is legal; and (4) upholding the compromise agreement Atlanta’s employees as early as March 3, 2004, with Sebolino scheduled to work on
involving Costales, Ramos, Villagomez, Almoite and Alegria. March 7-12, 2005 at 7:00 a.m. to 7:00 p.m., while Sagun was scheduled to work for the
same period but from 7:00 p.m. to 7:00 a.m. The CA noted that Atlanta
The CA Decision _______________

The CA granted the petition based on the following findings:10 12 CA Rollo, p. 323; petitioners’ Comment, p. 31, last paragraph.
The respondents were already employees of the company before they entered into 13 CA Rollo, p. 78.
the first and second apprenticeship agreements—Almoite and Costales were employed 14 Id., at p. 92.
as early as December 2003 and, subsequently, entered into a first apprenticeship
agreement from May 13, 2004 to October 12, 2004; before this first agreement expired, 686
a second apprenticeship agreement, from October 9, 2004 to March 8, 2005 was failed to challenge the authenticity of the two documents before it and the labor
executed. The same is true with Sebolino and Sagun, who were employed by Atlanta as authorities.
early as March 3, 2004. Sebolino entered into his first apprenticeship agreement with Atlanta and Chan moved for reconsideration, but the CA denied the motion in a
the company from March 20, 2004 to August 19, 2004, and his second apprenticeship resolution rendered on March 25, 2009.15 Hence, the present petition.
agreement from August 20, 2004 to January 19, 2005. Sagun, on the other hand,
entered into his first agreement from May 28, 2004 to October 8, 2004, and the second The Petition
agreement from October 9, 2004 to March 8, 2005. 1.
The first and second apprenticeship agreements were defective as they were Atlanta seeks a reversal of the CA decision, contending that the appellate court
executed in violation of the law and the rules. 2.11 The agreements did not indicate the erred in (1) concluding that Costales, Almoite, Sebolino and Sagun were employed by
trade or occupation in which the apprentice would be trained; neither was the Atlanta before they were engaged as apprentices; (2) ruling that a second
apprenticeship program approved by the Technical Education and Skills Development apprenticeship agreement is invalid; (3) declaring that the respondents were illegally
Authority (TESDA). dismissed; and (4) disregarding the compromise agreement executed by Costales and
_______________ Almoite. It submits the following arguments:
First. The CA’s conclusion that the respondent workers were company employees
10 Supra note 2. before they were engaged as apprentices was primarily based on the Monthly
11 Article 61 of the Labor Code, and its Implementing Rules and Regulations, Book Report16 and the Production and Work Schedule for March 7-12, 2005,17 in total
II, Rule VI, Section 18. disregard of the Master List18 prepared by the company accountant, Emelita M.
Bernardo. The names of Costales, Almoite, Sebolino and Sagun do not appear as
employees in the Master List which “contained the names of all the persons who were The respondent workers contend that the petition failed to comply with Section 4,
employed by and at petitioner.”19 Rule 45 of the Rules of Court which requires that the petition be accompanied by
Atlanta faults the CA for relying on the Production and Work Schedule and the supporting material portions of the records. The petitioners failed to attach to the
Monthly Report which were not sworn to, and in disregarding the Master List whose petition a copy of the Production and Work Schedule despite their submission that the
veracity was sworn to by Bernardo and by Alex Go who headed the company’s CA relied heavily on the document in finding the respondent workers’ prior employment
accounting division. It maintains that the CA should have given more credence to the with Atlanta. They also did not attach a copy of the compromise agreement purportedly
Master List. executed by Costales and Almoite. For this reason, the respondent workers submit that
_______________ the petition should be dismissed.
The respondents posit that the CA committed no error in holding that they were
15 Supra note 3. already Atlanta’s employees before they were engaged as apprentices, as confirmed by
16 Supra note 13. the company’s Production and Work Schedule.24 They maintain that the Production and
17 Supra note 14. Work Schedule meets the requirement of substantial evidence as the petitioners failed
18 Supra note 5. to question its authenticity. They point out that the schedule was prepared by Rose A.
19 Rollo, p. 22; Petition, p. 11, par. 1. Quirit and approved by Adolfo R. Lope, head of the company’s PE/Spiral Section. They
argue that it was highly unlikely that the head of a production section of the company
687 would prepare and assign work to the complainants if the latter had not been company
Second. In declaring invalid the apprenticeship agreements it entered into with the employees.
respondent workers, the CA failed to recognize the rationale behind the law on The respondent workers reiterate their mistrust of the Master List25 as evidence
apprenticeship. It submits that under the law,20 apprenticeship agreements are valid, that they were not employees of the company at the time they became apprentices.
provided they do not exceed six (6) months and the apprentices are paid the appropriate They label the Master List as “self-serving, dubious and even if considered as authentic,
wages of at least 75% of the applicable minimum wage. its content contradicts a lot of petitioner’s claim and allegations,”26 thus—
The respondents initially executed a five-month apprenticeship program with Aside from the fact that the Master List is not legible, it contains only the names of
Atlanta, at the end of which, they “voluntarily and willingly entered into another inactive employees. Even those found by the NLRC to have been employed in the
apprenticeship agreement with the petitioner for the training of a second skill” 21 for five company 1.
months; thus, the petitioners committed no violation of the apprenticeship period laid _______________
down by the law.
Further, the apprenticeship agreements, entered into by the parties, complied with 24 Supra note 14.
the requisites under Article 62 of the Labor Code; the company’s authorized 25 Supra note 5.
representative and the respondents signed the agreements and these were ratified by 26 Rollo, p. 127; respondents’ Comment, p. 3, par. 5.
the company’s apprenticeship committee. The apprenticeship program itself was
approved and certified by the TESDA.22 The CA, thus, erred in overturning the NLRC’s 689
finding that the apprenticeship agreements were valid. (such as Almoite, Costales and Sagun) do not appear in the list. If Costales and Almoite
Third. There was no illegal dismissal as the respondent workers’ tenure ended with had been employed with Atlanta since January 11, 2006, as the company
the expiration of the apprenticeship agreement they entered into. There was, therefore, claimed,27 their names would have been in the list, considering that the Master List
no regular employer-employee relationship between Atlanta and the respondent accounts for all employees “as of May 2006”—the notation carried on top of each page of
workers. the document.
The Case for Costales, Almoite, Sebolino and Sagun There were no entries of employees hired or resigned in the years 2005 and 2006
In a Comment filed on August 6, 2009,23 Costales, Almoite, Sebolino and Sagun despite the “as of May 2006” notation; several pages making up the Master List contain
pray for a denial of the petition for being procedurally defective and for lack of merit. names of employees for the years 1999-2004. 2.
_______________ The fact that Atlanta presented the purported Master List instead of the payroll
raised serious doubts on the authenticity of the list. 3.
20 Article 61 of the Labor Code. In sum, the respondent workers posit that the presentation of the Master List
21 Rollo, pp. 27-28; Petition, pp. 16-17. revealed the “intention of the herein petitioner[s] to perpetually hide the fact of [their]
22 CA Rollo, p. 354; Annex “4” of Atlanta’s Comment. prior employment.”28
23 Rollo, pp. 125-139. On the supposed apprenticeship agreements they entered into, Costales, Almoite,
Sebolino and Sagun refuse to accept the agreements’ validity, contending that the
688 company’s apprenticeship program is merely a ploy “to continually deprive [them] of
their rightful wages and benefits which are due them as regular employees.” 29 They The Court’s Ruling
submit the following “indubitable facts and ratiocinations:”30
The apprenticeship agreements were submitted to TESDA only in 2005 (with dates The procedural issue
of receipt on “1/4/ 1.05” & “2/22/05”31), when the agreements were supposed to have The respondent workers ask that the petition be dismissed outright for the
been executed in April or May 2004. Thus, the submission was made long after the petitioners’ failure to attach to the petition a copy of the Production and Work Schedule
starting date of the workers’ apprenticeship or even beyond the agreement’s and a copy of the compromise agreement Costales and Almoite allegedly entered into—
completion/termination material portions of the record that should accompany and support the petition,
_______________ pursuant to Section 4, Rule 45 of the Rules of Court.
In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena35 where
27 Rollo, p. 189. the Court addressed essentially the same issue arising from Section 2(d), Rule 42 of the
28 Id., at p. 151. Rules of Court,36 we held that the phrase “of the pleadings and other material portions
29 Id., at p. 130; Respondent’s Comment, p. 6, par. 12. of the record x x x as would support the allegation of the petition clearly contemplates
30 Ibid. the exercise of
31 CA Rollo, pp. 129-148 and 152-153. _______________

690 35 G.R. No. 162253, August 13, 2008, 562 SCRA 80, citing Atillo v. Bombay, 404
date, in violation of Section 23, Rule VI, Book II of the Labor Code. Phil. 179; 351 SCRA 361(2001).
The respondent workers were made to undergo apprenticeship for occupations 36 2. SEC.Form and contents.—The petition shall be filed in seven (7) legible
different from those allegedly approved by TESDA. TESDA approved Atlanta’s copies, with the original copy intended for the court being indicated as such by the
apprenticeship program on “Plastic Molder” 2.32 and not for extrusion molding petitioner, and shall (a) state the full names of the parties to the case, without
process, engineering, pelletizing process and mixing process. impleading the lower courts or judges thereof either as petitioners or respondents; (b)
The respondents were already skilled workers prior to the apprenticeship program indicate the specific material dates showing that it was filed on time; (c) set forth
as they had been employed and made to work in the different job positions where they concisely a statement of the matters involved, the issues raised, the specification of
had undergone training. Sagun and Sebolino, together with Mabanag, Pedregoza, dela errors of fact or law, or both, allegedly committed by the Regional Trial Court, and the
Cruz, Chiong, Magalang and Alegria were even given production assignments and work reasons or arguments relied upon for the allowance of the appeal; (d) be accompanied by
schedule at the PE/Spiral Section from May 11, 2004 to March 23, 2005, and some of clearly legible duplicate originals or true copies of the judgments or final orders of both
them were even assigned to the 3:00 p.m.-11:00 p.m. and graveyard shifts (11:00 p.m.- lower courts, certified correct by the clerk of court of the Regional Trial Court, the
7:00 a.m.) during the period. 3.33 requisite number of plain copies thereof and of the pleadings and other material
The respondent workers were required to continue as apprentices beyond six portions of the record as would support the allegations of the petition.
months. The TESDA certificate of completion indicates that the workers’ apprenticeship
had been completed after six months. Yet, they were suffered to work as apprentices 692
beyond that period. 4. discretion on the part of the petitioner in the selection of documents that are deemed to
Costales, Almoite, Sebolino and Sagun resolutely maintain that they were illegally be relevant to the petition. The crucial issue to consider then is whether or not the
dismissed, as the reason for the termination of their employment—notice of the documents accompanying the petition sufficiently supported the allegations therein.” 37
completion of the second apprenticeship agreement—did not constitute either a just or As in Mariners, we find that the documents attached to the petition sufficiently
authorized cause under Articles 282 and 283 of the Labor Code. support the petitioners’ allegations. The accompanying CA decision 38 and
Finally, Costales and Almoite refuse to be bound by the compromise resolution,39 as well as those of the labor arbiter40 and the NLRC,41 referred to the
agreement34 that Atlanta presented to defeat the parties’ position papers and even to their replies and rejoinders. Significantly, the CA
_______________ decision narrates the factual antecedents, defines the complainants’ cause of action, and
cites the arguments, including the evidence the parties adduced. If any, the defect in
32 Id., at p. 162, Annex “H”. the petition lies in the petitioners’ failure to provide legible copies of some of the
33 Id., at pp. 85-92-A; Petition for Certiorari, Annexes “JJ” to “RR”. material documents mentioned, especially several pages in the decisions of the labor
34 Id., at p. 286, Annex “RRR”. arbiter and of the NLRC. This defect, however, is not fatal as the challenged CA
decision clearly summarized the labor tribunal’s rulings. We, thus, find no procedural
691 obstacle in resolving the petition on the merits.
two workers’ cause of action. They claim that the supposed agreement is invalid as The merits of the case
against them, principally because they did not sign it. We find no merit in the petition. The CA committed no reversible error in
nullifying the NLRC decision42 and in affirming the labor arbiter’s ruling,43 as it applies
to Costales, Almoite, Sebolino and Sagun. Specifically, the CA correctly ruled that the arbiter, the NLRC and the CA itself. The appellate court, thus, found the said
four were illegally dismissed because (1) they were already employees when they were documents sufficient to establish the employment of the respondents before their
required to undergo engagement as apprentices.
_______________ Second. The Master List54 (of employees) that the petitioners heavily rely upon as
proof of their position that the respondents were not Atlanta’s employees, at the time
37 Supra note 35, at 87. they were engaged as apprentices, is unreliable and does not inspire belief.
38 Supra note 2. The list, consisting of several pages, is hardly legible. It requires extreme effort to
39 Supra note 3. sort out the names of the employees listed, as well as the other data contained in the
40 Rollo, pp. 89-99; Petition, Annex “N.” list. For this reason alone, the list deserves little or no consideration. As the
41 Id., at pp. 100-110; Petition, Annex “O.” respondents also pointed out, the list itself contradicts a lot of Atlanta’s claims and
42 Ibid. allegations, thus: it lists only the names of inactive employees; even the names of those
43 Supra note 40. the NLRC found to have been employed by Atlanta, like Costales and Almoite, and
those who even Atlanta claims attained regular status on January 11, 2006,55 do not
693 appear in the list when it was supposed to account for all employees “as of May 6,
apprenticeship and (2) apprenticeship agreements were invalid. 2006.” Despite the “May 6, 2006” cut off date, the list contains no entries of employees
The following considerations support the CA ruling. who were hired or who resigned in 2005 and 2006. We note that the list contains the
First. Based on company operations at the time material to the case, Costales, names of employees from 1999 to 2004.
Almoite, Sebolino and Sagun were already rendering service to the company as We cannot fault the CA for ignoring the Master List even if Bernardo, its head office
employees before they were made to undergo apprenticeship. The company itself accountant, swore to its correctness and authenticity.56 Its substantive unreliability
recognized the respondents’ status through relevant operational records—in the case of gives it very minimal probative value. Atlanta would have been better served, in terms
Costales and Almoite, the CPS monthly report for December 2003 44 which the NLRC of reliable evidence, if true copies of the payroll (on which the list was based, among
relied upon and, for Sebolino and Sagun, the production and work schedule for March 7 others, as Bernardo claimed in her affidavit) were presented instead.
to 12, 200545 cited by the CA. _______________
Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first
shift (7:00 a.m. to 3:00 p.m.) of the Section’s work. The Production and Work Schedules, 54 Supra note 5.
in addition to the one noted by the CA, showed that Sebolino and Sagun were scheduled 55 Supra note 5, caption of each page of the list’s last line.
on different shifts vis-à-vis the production and work of the company’s PE/Spiral Section 56 Rollo, p. 217; Bernardo’s Affidavit dated May 25, 2006.
for the periods July 5-10, 2004;46 October 25-31, 2004;47 November 8-14,
2004;48 November 16-22, 2004;49 January 3-9, 2005;50 January 10-15, 2005;51 March 7- 695
12, 200552 and March 17-23, 2005.53 Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering
We stress that the CA correctly recognized the authenticity of the operational service to the company when they were made to undergo apprenticeship (as established
documents, for the failure of Atlanta to raise a challenge against these documents by the evidence) renders the apprenticeship agreements irrelevant as far as the four are
before the labor concerned. This reality is highlighted by the CA finding that the respondents occupied
_______________ positions such as machine operator, scaleman and extruder operator—tasks that are
usually necessary and desirable in Atlanta’s usual business or trade as manufacturer of
44 Supra note 13. plastic building materials.57 These tasks and their nature characterized the four as
45 Supra note 14. regular employees under Article 280 of the Labor Code. Thus, when they were
46 CA Rollo, p. 86. dismissed without just or authorized cause, without notice, and without the opportunity
47 Id., at p. 87. to be heard, their dismissal was illegal under the law.58
48 Id., at p. 88. Even if we recognize the company’s need to train its employees through
49 Id., at p. 89. apprenticeship, we can only consider the first apprenticeship agreement for the
50 Id., at p. 90. purpose. With the expiration of the first agreement and the retention of the employees,
51 Id., at p. 91. Atlanta had, to all intents and purposes, recognized the completion of their training and
52 Id., at p. 92. their acquisition of a regular employee status. To foist upon them the second
53 Id., at p. 92-A. apprenticeship agreement for a second skill which was not even mentioned in the
agreement itself,59 is a violation of the Labor Code’s implementing rules 60 and is an act
694 manifestly unfair to the employees, to say the least. This we cannot allow.
Fourth. The compromise agreement61 allegedly entered into by Costales and
Almoite, together with Ramos, Villagomez and Alegria, purportedly in settlement of the
case before
_______________

57 Id., at p. 60; CA Decision, p. 19, par. 1.


58 Articles 279 & 277 (b) of the Labor Code.
59 Rollo, pp. 67-82; copies of the second apprenticeship agreements.
60 Section 18, Rule VI, Book II of the Implementing Rules and Regulations of the
Labor Code.
61 CA Rollo, pp. 286-287.

696
the NLRC, is not binding on Costales and Almoite because they did not sign it. The
company itself admitted62 that while Costales and Almoite were initially intended to be
a part of the agreement, it did not pursue their inclusion “due to their regularization as
early as January 11, 2006.”63
WHEREFORE, premises considered, we hereby DENY the petition for lack of merit.
The assailed decision and resolution of the Court of Appeals are AFFIRMED. Costs
against the petitioner Atlanta Industries, Inc.
SO ORDERED.
Carpio-Morales, Bersamin, Villarama, Jr. and Sereno, JJ., concur.

Petition denied, judgment and resolution affirmed.

Note.—Even if an employee is engaged to perform activities that are necessary or


desirable in the usual trade or business of the employer, it does not preclude the fixing
of employment for a definite period. (Caparoso vs. Court of Appeals, 516 SCRA 30
[2007])
——o0o——
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
G.R. No. 122917. July 12, 1999.* performing the job for at least one year, even if the performance is not continuous and
MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. merely intermittent, the law deems repeated and continuing need for its performance
PASCUAL, RAQUEL ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, as sufficient evidence of the necessity if not indispensability of that activity to the
JOSELITO O. AGDON, GEORGE P. LIGUTAN, JR., CELSO M. YAZAR, ALEX G. business. Hence, the employment is considered regular, but only with respect to such
CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C. DELOS activity, and while such activity exists.”
REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F. Same; Same; When the bank renewed the contract after the lapse of the six-month
TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO, DORENDA probationary period, the employees thereby became regular employees.—As held by the
CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E. Court, “Articles 280 and 281 of the Labor Code put an end to the pernicious practice of
SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY making permanent casuals of our lowly employees by the simple expedient of extending
V. GRUELA, BERNADETH D. AGERO, CYNTHIA to them probationary appointments, ad infinitum.” The contract signed by petitioners is
akin to a probationary employment, during which the bank determined the employees’
_______________ fitness for the job. When the bank renewed the contract after the lapse of the six-month
probationary period, the employees thereby became regular employees. No employer is
* THIRD DIVISION. allowed to determine indefinitely the fitness of its employees.
187 Same; Same; As regular employees, the twenty-seven petitioners are entitled to
DE VERA, LANI R. CORTEZ, MA. ISABEL B. CONCEPCION, DINDO VALERIO, security of tenure; that is, their services may be terminated only for a just or authorized
ZENAIDA MATA, ARIEL DEL PILAR, MARGARET CECILIA CANOZA, THELMA cause.—As regular employees, the twenty-seven petitioners are entitled to security of
SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA tenure; that is, their services may be terminated only for a just or authorized cause.
PASCUAL, PINKY BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO and RICO Because respondent failed to show such cause, these twenty-seven petitioners are
TIMOSA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and FAR deemed illegally dismissed and therefore entitled to back wages and reinstatement
EAST BANK AND TRUST COMPANY, respondents. without loss of seniority rights and other privileges. Considering the allegation of
Labor Law; Labor Code; The facts, viewed in light of the Labor Code and the respondent that the job of money sorting is no longer available because it has been
Magna Carta for Disabled Persons, indubitably show that the petitioners, except sixteen assigned back to the tellers to whom it originally belonged, petitioners are hereby
of them, should be deemed regular employees.—At the outset, let it be known that this awarded separation pay in lieu of reinstatement.
Court appreciates the nobility of private respondent’s effort to provide employment to Same; Same; An employee is regular because of the nature of work and the length
physically impaired individuals and to make them more productive members of society. of service, not because of the mode or even the reason for hiring them.—Respondent
However, we cannot allow it to elude the legal consequences of that effort, simply argues that petitioners were merely “accommodated” employees. This fact does not
because it now deems their employment irrelevant. The facts, viewed in light of the change the nature of their employment. As earlier noted, an employee is regular
Labor Code and the Magna Carta for Disabled Persons, indubitably show that the 189
petitioners, except sixteen of them, should be deemed regular employees. As such, they because of the nature of work and the length of service, not because of the mode or
have acquired legal rights that this Court is duty-bound to protect and uphold, not as a even the reason for hiring them.
matter of compassion but as a consequence of law and justice. Same; Same; The determination of whether employment is casual or regular does
Same; Same; Since the Magna Carta accords them the rights of qualified able- not depend on the will or word of the employer, and the procedure of hiring x x x but on
bodied persons, they are thus covered by Article 280 of the Labor Code.—The fact that the nature of the activities performed by the employee, and to some extent, the length of
the employees were qualified disabled persons necessarily removes the employment performance and its continued existence.—Equally unavailing are private respondent’s
contracts from the ambit of Article 80. Since the Magna Carta accords them the rights arguments that it did not go out of its way to recruit petitioners, and that its plantilla
of qualified able-bodied persons, they are thus covered by Article 280 of the Labor Code. did not contain their positions. In L. T. Datu v. NLRC, the Court held that “the
Same; Same; The test of whether an employee is regular was laid down in De Leon determination of whether employment is casual or regular does not depend on the will
vs. National Labor Relations Commission.—The test of whether an employee is regular or word of the employer, and the procedure of hiring x x x but on the nature of the
was laid down in De Leon v. NLRC, in which this Court held: “The primary standard, activities performed by the employee, and to some extent, the length of performance
therefore, of determining regular employment is the reasonable connection between the and its continued existence.”
particular activity performed by the employee in relation to the usual trade or business Same; Same; The well-settled rule is that the character of employment is
of the employer. The test is whether the former is usually necessary or desirable in the determined not by stipulations in the contract, but by the nature of the work
usual business or trade of the employer. The connection can be determined performed.—Private respondent argues that the petitioners were informed from the
188 start that they could not become regular employees. In fact, the bank adds, they agreed
with the stipulation in the contract regarding this point. Still, we are not persuaded.
The well-settled rule is that the character of employment is determined not by 3 Penned by Presiding Comm. Lourdes C. Javier and concurred in by Comm.

stipulations in the contract, but by the nature of the work performed. Otherwise, no Joaquin A. Tanodra. The other member, Comm. Ireneo B. Bernardo, dissented.
employee can become regular by the simple expedient of incorporating this condition in 4 Rollo, p. 113.

the contract of employment. 191


Same; Same; The noble objectives of Magna Carta for Disabled Persons are not “WHEREFORE, judgment is hereby rendered dismissing the above-mentioned
based merely on charity or accommodation, but on justice and the equal treatment of complaint for lack of merit.”
qualified persons, disabled or not.—In rendering this decision, the Court emphasizes
not only the constitutional bias in favor of the working class, but also the concern of the Also assailed is the August 4, 1995 Resolution5 of the NLRC, which denied the
State for the plight of the disabled. The noble objectives of Magna Carta for Disabled Motion for Reconsideration.
Persons are not based merely on charity or accommodation, but on justice and the equal The Facts
treatment of qualified persons, disabled or not. In the present case, the handicap of
petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of this The facts were summarized by the NLRC in this wise:6
statement is the repeated renewal of their employment contracts. Why then should they “Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on
be dismissed, simply because they are physically impaired? The Court believes, that, various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
after showing their fitness for the work assigned to them, they should be Money Sorters and Counters through a uniformly worded agreement called
190 ‘Employment Contract for Handicapped Workers.’ (pp. 68 & 69, Records) The full text of
treated and granted the same rights like any other regular employees. said agreement is quoted below:

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court. ‘EMPLOYMENT CONTRACT FOR
Sentro ng Alternatibong Lingap Panlegal (SALIGAN) for petitioners. HANDICAPPED WORKERS
Picazo, Buyco, Tan, Fider & Santos for private respondent.

This Contract, entered into by and between:


FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly
PANGANIBAN, J.: organized and existing under and by virtue of the laws of the Philippines, with business
address at FEBTC Building, Muralla, Intramuros, Manila, represented herein by its
Assistant Vice President, MR. FLORENDO G. MARANAN, (hereinafter referred to as
The Magna Carta for Disabled Persons mandates that qualified disabled persons be the ‘BANK’);
granted the same terms and conditions of employment as qualified able-bodied
employees. Once they have attained the status of regular workers, they should be - and -
accorded all the benefits granted by law, notwithstanding written or verbal contracts to
the contrary. This treatment is rooted not merely on charity or accommodation, but on _________________, _________________ years old, of legal age,
justice for all. _____________________, and residing at _________________
The Case (hereinafter referred to as the (‘EMPLOYEE’).

Challenged in the Petition for Certiorari1 before us is the June 20, 1995 Decision2 of WITNESSETH: That
the National Labor Relations Commission (NLRC),3 which affirmed the August, 22 1994
ruling of Labor Arbiter Cornelio L. Linsangan. The labor arbiter’s Decision disposed as WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a
follows:4 need to provide disabled and handicapped persons gainful employment and
opportunities to realize their potentials, uplift their socio-economic well being and
_______________ welfare and make them productive, self-reliant and useful

1 Rollo, pp. 3-39. _______________


2 Rollo, pp. 46-65.
5 Rollo, pp. 73-74.
6 NLRC Decision, pp. 2-10; rollo, pp. 47-55. 1. 7.The EMPLOYEE binds himself/herself to abide [by] and comply with all the
192 BANK Rules and Regulations and Policies, and to conduct himself/herself in a
citizens to enable them to fully integrate in the mainstream of society; manner expected of all employees of the BANK.
WHEREAS, there are certain positions in the BANK which may be filled-up by 2. 8.The EMPLOYEE acknowledges the fact that he/she had been employed
disabled and handicapped persons, particularly deaf-mutes, and the BANK ha[s] been under a special employment program of the BANK, for which reason the
approached by some civic-minded citizens and authorized government agencies standard hiring requirements of the BANK were not applied in his/her case.
[regarding] the possibility of hiring handicapped workers for these positions; Consequently, the EMPLOYEE acknowledges and accepts the fact that the
WHEREAS, the EMPLOYEE is one of those handicapped workers who [were] terms and conditions of the employment generally observed by the BANK
recommended for possible employment with the BANK; with respect to the BANK’s regular employee are not applicable to the
NOW, THEREFORE, for and in consideration of the foregoing premises and in EMPLOYEE, and that therefore, the terms and conditions of the
compliance with Article 80 of the Labor Code of the Philippines as amended, the BANK EMPLOYEE’s employment with the BANK shall be governed solely and
and the EMPLOYEE have entered into this Employment Contract as follows: exclusively by this Contract and by the applicable rules and regulations that
the Department of Labor and Employment may issue in connection with the
1. 1.The BANK agrees to employ and train the EMPLOYEE, and the employment of disabled and handicapped workers. More specifically, the
EMPLOYEE agrees to diligently and faithfully work with the BANK, EMPLOYEE hereby acknowledges that the provisions of Book Six of the
as Money Sorter and Counter. Labor Code of the Philippines as amended, particularly on regulation of
2. 2.The EMPLOYEE shall perform among others, the following duties and employment and separation pay are not applicable to him/her.
responsibilities: 3. 9.The Employment Contract shall be for a period of six (6) months or from ____
to ____ unless earlier terminated by the BANK for any just or reasonable
cause. Any continuation or extension of this Contract shall be in writing and
1. i.Sort out bills according to color; therefore this Contract will automatically expire at the end of its terms
2. ii.Count each denomination per hundred, either manually or with the aid unless renewed in writing by the BANK.
of a counting machine;
3. iii.Wrap and label bills per hundred;
4. iv.Put the wrapped bills into bundles; and 194
5. v.Submit bundled bills to the bank teller for verification. IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this
____ day of _________________,____________ at Intramuros, Manila, Philippines.’
“In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two
1. 3.The EMPLOYEE shall undergo a training period of one (1) month, after (2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one (21).
which the BANK shall determine whether or not he/she should be allowed to Their employment[s] were renewed every six months such that by the time this case
finish the remaining term of this Contract. arose, there were fifty-six (56) deaf-mutes who were employed by respondent under the
2. 4.The EMPLOYEE shall be entitled to an initial compensation of P118.00 per said employment agreement. The last one was Thelma Malindoy who was employed in
day, subject to adjustment in the sole judgment of the BANK, payable every
1992 and whose contract expired on July 1993.
15th and end of the month. xxx xxx xxx
3. 5.The regular work schedule of the EMPLOYEE shall be five (5) days per week, “Disclaiming that complainants were regular employees, respondent Far East Bank
from Mondays thru Fridays, at eight
and Trust Company maintained that complainants who are a special class of workers—
the hearing impaired employees were hired temporarily under [a] special employment
193 arrangement which was a result of overtures made by some civic and political
personalities to the respondent Bank; that complain-ant[s] were hired due to ‘pakiusap’
1. (8) hours a day. The EMPLOYEE may be required to perform overtime work as which must be considered in the light of the context of the respondent Bank’s corporate
circumstance may warrant, for which overtime work he/she [shall] be paid an philosophy as well as its career and working environment which is to maintain and
additional compensation of 125% of his daily rate if performed during strengthen a corps of professionals trained and qualified officers and regular employees
ordinary days and 130% if performed during Saturday or [a] rest day. who are baccalaureate degree holders from excellent schools which is an unbending
2. 6.The EMPLOYEE shall likewise be entitled to the following benefits: policy in the hiring of regular employees; that in addition to this, training continues so
that the regular employee grows in the corporate ladder; that the idea of hiring
handicapped workers was acceptable to them only on a special arrangement basis; that
1. i.Proportionate 13th month pay based on his basic daily wage.
it adopted the special program to help tide over a group of handicapped workers such as
2. ii.Five (5) days incentive leave.
deaf-mutes like the complainants who could do manual work for the respondent Bank;
3. iii.SSS premium payment.
that the task of counting and sorting of bills which was being performed by tellers could
be assigned to deaf-mutes; that the counting and sorting of money are tellering works Issues
which were always logically and naturally part and parcel of the tellers’ normal
functions; that from the beginning there have been no separate items in the respondent In their Memorandum, petitioners cite the following grounds in support of their
Bank plantilla for sorters or counters; that the tellers themselves already did the cause:
sorting and counting chore as a regular feature and integral part of their duties (p. 97,
Records); that through the ‘pakiusap’ of Arturo Borjal, the tellers were relieved of this
task of counting and sorting bills in favor of deaf-mutes without creating new positions 1. “I.The Honorable Commission committed grave abuse of discretion in holding
as there is no position either in the that the petitioners—money sorters and counters working in a bank—were
195 not regular employees.
respondent or in any other bank in the Philippines which deals with purely counting 2. “II.The Honorable Commission committed grave abuse of discretion in holding
and sorting of bills in banking operations.” that the employment contracts signed and renewed by the petitioners—which
provide for a period of six (6) months—were valid.
Petitioners specified when each of them was hired and dismissed, viz.:7 3. “III.The Honorable Commission committed grave abuse of discretion in not
applying the provisions of the Magna Carta for the Disabled (Republic Act
No. 7277), on proscription against discrimination against disabled persons.” 11
_______________

7 Petition, p. 12; rollo, p. 14.


8 This is a typographical error on the part of the petitioner, for it is unlikely that the In the main, the Court will resolve whether petitioners have become regular
Contract of Employment was terminated the day after it was executed. In fact, Annex employees.
“C” of petitioners’ Position Paper, which was submitted before the labor arbiter, shows This Court’s Ruling
that Petitioner Robert Marcelo was hired on July 31, 1992, not 1993 (Rollo, p. 100.).
196 The petition is meritorious. However, only the employees, who worked for more
than six months and whose contracts were renewed are deemed regular. Hence, their
As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein dismissal from employment was illegal.
petitioners. Hence, this recourse to this Court.9 Preliminary Matter:
The Ruling of the NLRC Propriety of Certiorari

In affirming the ruling of the labor arbiter that herein petitioners could not be Respondent Far East Bank and Trust Company argues that a review of the findings
deemed regular employees under Article 280 of the Labor Code, as amended, of facts of the NLRC is not allowed in a petition for certiorari. Specifically, it maintains
Respondent Commission ratiocinated as follows: that the Court cannot pass upon the findings of public respondents that petitioners
“We agree that Art. 280 is not controlling herein. We give due credence to the were not regular employees.
conclusion that complainants were hired as an accommodation to [the] recommendation
of civic oriented personalities whose employment[s] were covered by x x x Employment
_______________
Contract[s] with special provisions on duration of contract as specified under Art. 80.
Hence, as correctly held by the Labor Arbiter a quo, the terms of the contract shall be 11Petitioners’ Memorandum, p. 3; rollo, p. 474.
the law between the parties.”10
198
The NLRC also declared that the Magna Carta for Disabled Persons was not
True, the Court, as a rule, does not review the factual findings of public respondents
applicable, “considering the prevailing circumstances/milieu of the case.”
in a certiorari proceeding. In resolving whether the petitioners have become regular
employees, we shall not change the facts found by the public respondent. Our task is
_______________
merely to determine whether the NLRC committed grave abuse of discretion in
9 The case was deemed submitted for resolution on December 1, 1998, when the
applying the law to the established facts, as above-quoted from the assailed Decision.
Memorandum of the private respondent was received by the Court. The case was given Main Issue:
due course on December 8, 1997. Are Petitioners Regular Employees?
10 NLRC Decision, p. 18; rollo, p. 63.

197
Petitioners maintain that they should be considered regular employees, because 3. (c)The duration of employment period; and
their task as money sorters and counters was necessary and desirable to the business of 4. (d)The work to be performed by handicapped workers.
respondent bank. They further allege that their contracts served merely to preclude the
application of Article 280 and to bar them from becoming regular employees. The employment agreement shall be subject to inspection by the Secretary of Labor
Private respondent, on the other hand, submits that petitioners were hired only as or his duly authorized representatives.”
“special workers and should not in any way be considered as part of the regular 200
complement of the Bank.”12 Rather, they were “special” workers under Article 80 of the
Labor Code. Private respondent contends that it never solicited the services of The stipulations in the employment contracts indubitably conform with the
petitioners, whose employment was merely an “accommodation” in response to the aforecited provision. Succeeding events and the enactment of RA No. 7277 (the Magna
requests of government officials and civic-minded citizens. They were told from the Carta for Disabled Persons),13 however, justify the application of Article 280 of the
start, “with the assistance of government representatives,” that they could not become Labor Code.
regular employees because there were no plantilla positions for “money sorters,” whose Respondent bank entered into the aforesaid contract with a total of 56 handicapped
task used to be performed by tellers. Their contracts were renewed several times, not workers and renewed the contracts of 37 of them. In fact, two of them worked from 1988
because of need “but merely for humanitarian reasons.” Respondent submits that “as of to 1993. Verily, the renewal of the contracts of the handicapped workers and the hiring
the present, the ‘special position’ that was created for the petitioners no longer exist[s] of others lead to the conclusion that their tasks were beneficial and necessary to the
in private respondent [bank], after the latter had decided not to renew anymore their bank. More important, these facts show that they were qualified to perform the
special employment contracts.” responsibilities of their positions. In other words, their disability did not render them
unqualified or unfit for the tasks assigned to them.
_______________ In this light, the Magna Carta for Disabled Persons mandates that
a qualified disabled employee should be given the same terms and conditions of
12Respondent’s Memorandum, p. 10; rollo, p. 523. employment as a qualified able-bodied person. Section 5 of the Magna Carta provides:
199 “Section 5. Equal Opportunity for Employment.—No disabled person shall be denied
access to opportunities for suitable employment. A qualified disabled employee shall be
At the outset, let it be known that this Court appreciates the nobility of private subject to the same terms and conditions of employment and the same compensation,
respondent’s effort to provide employment to physically impaired individuals and to privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied
make them more productive members of society. However, we cannot allow it to elude person.”
the legal consequences of that effort, simply because it now deems their employment The fact that the employees were qualified disabled persons necessarily removes the
irrelevant. The facts, viewed in light of the Labor Code and the Magna Carta for employment contracts from the ambit of Article 80. Since the Magna Carta accords
Disabled Persons, indubitably show that the petitioners, except sixteen of them, should them the rights of qualified able-bodied persons, they are thus covered by Article 280 of
be deemed regular employees. As such, they have acquired legal rights that this Court the Labor Code, which provides:
is duty-bound to protect and uphold, not as a matter of compassion but as a “ART. 280. Regular and Casual Employment.—The provisions of written agreement
consequence of law and justice. to the contrary notwithstanding and regardless of the oral agreement of the parties, an
The uniform employment contracts of the petitioners stipulated that they shall be employment shall be deemed to be regular where the employee has been engaged to
trained for a period of one month, after which the employer shall determine whether or
not they should be allowed to finish the 6-month term of the contract. Furthermore, the _______________
employer may terminate the contract at any time for a just and reasonable cause.
Unless renewed in writing by the employer, the contract shall automatically expire at 13 Approved on March 24, 1992.
the end of the term. 201
According to private respondent, the employment contracts were prepared in perform activities which are usually necessary or desirable in the usual business or
accordance with Article 80 of the Labor Code, which provides: trade of the employer, except where the employment has been fixed for a specific project
“ART. 80. Employment agreement.—Any employer who employs handicapped or undertaking the completion or termination of which has been determined at the time
workers shall enter into an employment agreement with them, which agreement shall of the engagement of the employee or where the work or services to be performed is
include: 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
1. (a)The names and addresses of the handicapped workers to be employed; paragraph: Provided, That, any employee who has rendered at least one year of service,
2. (b)The rate to be paid the handicapped workers which shall be not less than whether such service is continuous or broken, shall be considered as regular employee
seventy five (75%) per cent of the applicable legal minimum wage;
with respect to the activity in which he is employed and his employment shall continue assigned back to the tellers to whom it originally belonged, 19 petitioners are hereby
while such activity exists.” awarded separation pay in lieu of reinstatement.20

The test of whether an employee is regular was laid down in De Leon v. NLRC,14 in _______________
which this Court held:
“The primary standard, therefore, of determining regular employment is the 15 CENECO v. NLRC, 236 SCRA 108, September 1, 1994, per Puno, J.
reasonable connection between the particular activity performed by the employee in 16 Ibid.; Article 281, Labor Code.
relation to the usual trade or business of the employer. The test is whether the former 17 Articles 282 to 284 of the Code.
is usually necessary or desirable in the usual business or trade of the employer. The 18 Article 279 of the Labor Code as amended.
connection can be determined by considering the nature of the work performed and its 19 Respondent’s Memorandum, p. 16; rollo, p. 529.
relation to the scheme of the particular business or trade in its entirety. Also if the 20 Zarate v. Olegario, 263 SCRA 1, October 7, 1996.
employee has been performing the job for at least one year, even if the performance is 203
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 Because the other sixteen worked only for six months, they are not deemed regular
activity to the business. Hence, the employment is considered regular, but only with employees and hence not entitled to the same benefits.
respect to such activity, and while such activity exists.”
Applicability of the
Without a doubt, the task of counting and sorting bills is necessary and desirable to Brent Ruling
the business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months. Thus, the following twenty-seven Respondent bank, citing Brent School v. Zamora21 in which the Court upheld the
petitioners should be deemed regular employees: Marites Bernardo, Elvira Go validity of an employment contract with a fixed term, argues that the parties entered
Diamante, Rebecca E. into the contract on equal footing. It adds that the petitioners had in fact an advantage,
because they were backed by then DSWD Secretary Mita Pardo de Tavera and
_______________ Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that
14 176 SCRA 615, 621, August 21, 1989, per Fernan, CJ. the petitioners were disabled, and that the bank had to determine their fitness for the
202 position. Indeed, its validity is based on Article 80 of the Labor Code. But as noted
David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito earlier, petitioners proved themselves to be qualified disabled persons who, under the
O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Magna Carta for Disabled Persons, are entitled to terms and conditions of employment
Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de enjoyed by qualified able-bodied individuals; hence, Article 80 does not apply because
Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma petitioners are qualified for their positions. The validation of the limit imposed on their
Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, contracts, imposed by reason of their disability, was a glaring instance of the very
Elizabeth Ventura and Grace S. Pardo. mischief sought to be addressed by the new law.
As held by the Court, “Articles 280 and 281 of the Labor Code put an end to the Moreover, it must be emphasized that a contract of employment is impressed with
pernicious practice of making permanent casuals of our lowly employees by the simple public interest.22 Provisions of applicable statutes are deemed written into the contract,
expedient of extending to them probationary appointments, ad infini-tum.”15 The and the “parties are not at liberty to insulate themselves and their relationships from
contract signed by petitioners is akin to a probationary employment, during which the the impact of labor laws and regulations by
bank determined the employees’ fitness for the job. When the bank renewed the
contract after the lapse of the six-month probationary period, the employees thereby _______________
became regular employees.16 No employer is allowed to determine indefinitely the
fitness of its 21 181 SCRA 802, February 6, 1990.
employees. As regular employees, the twenty-seven petitioners are entitled to 22 Article 1700 of the Civil Code provides: “The relations between capital and labor
security of tenure; that is, their services may be terminated only for a just or authorized are not merely contractual. They are so impressed with public interest that labor
cause. Because respondent failed to show such cause,17 these twenty-seven petitioners contracts must yield to the common good. x x x.”
are deemed illegally dismissed and therefore entitled to back wages and reinstatement 204
without loss of seniority rights and other privileges.18 Considering the allegation of simply contracting with each other.”23 Clearly, the agreement of the parties regarding
respondent that the job of money sorting is no longer available because it has been the period of employment cannot prevail over the provisions of the Magna Carta for
Disabled Persons, which mandate that petitioners must be treated as qualified able- “x x x xxx xxx
bodied employees. “At this juncture, the leading case of Brent School, Inc. v. Zamora proves
Respondent’s reason for terminating the employment of petitioners is instructive. instructive. As reaffirmed in subsequent cases, this Court has upheld the legality of
Because the Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be fixed-term employment. It ruled that the decisive determinant in ‘term employment’
turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m., respondent should not be the activities that the employee is called upon to perform but the day
resorted to nighttime sorting and counting of money. Thus, it reasons that this task certain agreed upon the parties for the commencement and termination of their
“could not be done by deaf mutes because of their physical limitations as it is very risky employment relationship. But this Court went on to say that where from the
for them to travel at night.”24 We find no basis for this argument. Travelling at night circumstances it is apparent that the periods have been imposed to preclude acquisition
involves risks to handicapped and able-bodied persons alike. This excuse cannot justify of tenurial security by the employee, they should be struck down or disregarded as
the termination of their employment. contrary to public policy and morals.”
Other Grounds Cited by Respondent
_______________
Respondent argues that petitioners were merely “accommodated” employees. This
fact does not change the nature of their employment. As earlier noted, an employee is 26A.M. Oreta & Co. v. NLRC, 176 SCRA 208, August 10, 1989.
regular because of the nature of work and the length of service, not because of the mode 27GR No. 122327, August 19, 1998, 294 SCRA 411, per Martinez, J.
or even the reason for hiring them. 206
Equally unavailing are private respondent’s arguments that it did not go out of its
way to recruit petitioners, and that its plantilla did not contain their positions. In L. T. In rendering this Decision, the Court emphasizes not only the constitutional bias in
Datu v. NLRC,25 the Court held that “the determination of whether employment is favor of the working class, but also the concern of the State for the plight of the
casual or regular does not depend on the will or word of the employer, and the disabled. The noble objectives of Magna Carta for Disabled Persons are not based
procedure of hiring x x x but on the nature of the activities performed by the employee, merely on charity or accommodation, but on justice and the equal treatment
and of qualified persons, disabled or not. In the present case, the handicap of petitioners
(deaf-mutes) is not a hindrance to their work. The eloquent proof of this statement is
_______________ the repeated renewal of their employment contracts. Why then should they be
dismissed, simply because they are physically impaired? The Court believes, that, after
23 Pakistan Airlines Corporation v. Ople, 190 SCRA 90, September 28, 1990, per showing their fitness for the work assigned to them, they should be treated and granted
Feliciano, J. See also Servidad v. NLRC, GR No. 128682, March 18, 1999, 305 SCRA the same rights like any other regular employees.
49; Villa v. NLRC, 284 SCRA 105, January 14, 1998. In this light, we note the Office of the Solicitor General’s prayer joining the
24 Respondent’s Memorandum, p. 15; rollo, p. 528. petitioners’ cause.28
25 253 SCRA 440, 450, February 9, 1996, per Kapunan, J. WHEREFORE, premises considered, the Petition is hereby GRANTED. The June
205 20, 1995 Decision and the August 4, 1995 Resolution of the NLRC are REVERSED and
to some extent, the length of performance and its continued existence.” SET ASIDE. Respondent Far East Bank and Trust Company is hereby ORDERED to
Private respondent argues that the petitioners were informed from the start that pay back wages and separation pay to each of the following twenty-seven (27)
they could not become regular employees. In fact, the bank adds, they agreed with the petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P.
stipulation in the contract regarding this point. Still, we are not persuaded. The well- Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George
settled rule is that the character of employment is determined not by stipulations in the P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G.
contract, but by the nature of the work performed.26 Otherwise, no employee can Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani
become regular by the simple expedient of incorporating this condition in the contract of R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma.
employment. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura
In this light, we iterate our ruling in Romares v. NLRC:27 and Grace S. Pardo. The NLRC is hereby directed to compute the exact amount due
“Article 280 was emplaced in our statute books to prevent the circumvention of the each of said employees, pursuant to existing laws and regulations, within fifteen days
employee’s right to be secure in his tenure by indiscriminately and completely ruling from the finality of this Decision. No costs.
out all written and oral agreements inconsistent with the concept of regular
employment defined therein. Where an employee has been engaged to perform activities _______________
which are usually necessary or desirable in the usual business of the employer, such
employee is deemed a regular employee and is entitled to security of tenure 28Manifestation of the Office of the Solicitor General; rollo, pp. 354-375.
notwithstanding the contrary provisions of his contract of employment. 207
SO ORDERED.
Romero (Chairman), Vitug, Purisima and Gonzaga-Reyes, JJ., concur.
Petition granted; Appealed decision and resolution reversed and set aside.
Note.—Where workers were tasked to undertake activities usually desirable or
necessary in the usual business of their employer, and such service was rendered for
almost two years, they have attained the status of regular employees. (Guinnux
Interiors, Inc. vs. National Labor Relations Commission, 272 SCRA 689 [1997])

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