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Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 111651 March 15, 1996

OSMALIK S. BUSTAMANTE, PAULINO A. BANTAYAN, FERNANDO L. BUSTAMANTE, MARIO D. SUMONOD,

and SABU J. LAMARAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, FIFTH DIVISION and EVERGREEN FARMS, INC., respondents.

PADILLA, J.:p
This petition for certiorari seeks to reverse the 3 May 1993 resolution of the National Labor Relations Commission (NLRC) which set aside its earlier resolution
dated 8 March 1993 and deleted the award of backwages in favor of petitioners.

The focal issue therefore in this case is whether or not petitioners are entitled to backwages after a finding by the
NLRC itself that they had become regular employees after serving for more than one (1) year of broken or non-
continuous service as probationary employees.

The facts are not in dispute. Respondent company is engaged in the business of producing high grade bananas in
its plantation in Davao del Norte. Petitioners Paulino Bantayan, Fernando Bustamante, Mario Sumonod and
Osmalik Bustamante were employed as laborers and harvesters while petitioner Sabu Lamaran was employed as a
laborer and sprayer in respondent company's plantation. All the petitioners signed contracts of employment for a
period of six (6) months from 2 January 1990 to 2 July 1990, but they had started working sometime in September
1989. Previously, they were hired to do the same work for periods lasting a month or more, from 1985 to 1989.
Before the contracts of employment expired on 2 July 1990, petitioners' employments were terminated on 25 June
1990 on the ground of poor performance on account of age, as not one of them was allegedly below forty (40) years
old.

Petitioners filed a complaint for illegal dismissal before the Regional Arbitration Branch, Branch XI of the NLRC in
Davao City. On 26 April 1991, the labor arbiter rendered judgment in favor of petitioners, thus —

WHEREFORE, judgment is hereby rendered:

1. Declaring the dismissal of the complainants as illegal;

2. Ordering respondent Evergreen Farms, Inc. to immediately reinstate complainants to their former
position with six (6) months backwages computed as follows (26.17 x P79.00 per day equals P2,067.43
x 6 months equals P12,404.58 times 5 complainants equals Sixty Two Thousand Four Hundred Four &
58/100 (P62,404.58) PESOS. However, if reinstatement is no longer feasible an additional one (1)
month salary shall be awarded as a form of separation pay;

3. The claims for underpayment of wages is hereby dismissed for lack of merit.

SO ORDERED.1

On 8 March 1993, public respondent dismissed the appeal of private respondent company for lack of merit Private
respondent filed a motion for reconsideration dated 1 April 1993. Acting on said motion, public respondent issued a
second resolution on 3 May 1993 affirming its earlier resolution on illegal dismissal but deleting the award of
backwages on the ground that the termination of petitioners' employments "was the result of the latter's (private
respondent) mistaken interpretation of the law and that the same was therefore not necessarily attended by bad
faith, nor arbitrariness, . . .".2

In their present petition, petitioners argue that the public respondent gravely abused its discretion in rendering the
second resolution which removed the award of backwages in their favor.

We rule in favor of petitioners.

It is undisputed that petitioners were illegally dismissed from employment. Article 280 of the Labor Code states:

Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed
to be regular where the employee has been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer, except where the employment has been
fired for a specific project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be performed is seasonal
in nature and the employment is for the duration of the season.

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

This provision draws a line between regular and casual employment, a distinction however often abused by
employers. The provision enumerates two (2) kinds of employees, the regular employees and the casual
employees. The regular employees consist of the following:
1) those engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer; and

2) those who have rendered at least one year of service whether such service is continuous or broken.

The law distinguishes between the two (2) kinds of employees to protect the interests of labor. Thus, in the case of
Baguio Country Club Corporation vs. NLRC,3 the Court declared: "Its language evidently manifests the intent to
safeguard the tenurial interest of the worker who may be denied the rights and benefits due a regular employee by
virtue of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on
a casual status for as long as convenient . . . ".

In the case at bar, petitioners were employed at various periods from 1985 to 1989 for the same kind of work they
were hired to perform in September 1989. Both the labor arbiter and the respondent NLRC agree that petitioners
were employees engaged to perform activities necessary in the usual business of the employer. As laborers,
harvesters or sprayers in an agricultural establishment which produces high grade bananas, petitioners' tasks are
indispensable to the year-round operations of respondent company. This belies the theory of respondent company
that the employment of petitioners was terminated due to the expiration of their probationary period in June 1990. If
at all significant, the contract for probationary employment was utilized by respondent company as a chicanery to
deny petitioners their status as regular employees and to evade paying them the benefits attached to such status.
Some of the petitioners were hired as far back as 1985, although the hiring was not continuous. They were hired
and re-hired in a span of from two to four years to do the same type of work which conclusively shows the necessity
of petitioners' service to the respondent company's business. Petitioners have, therefore, become regular
employees after performing activities which are necessary in the usual business of their employer. But, even
assuming that the activities of petitioners in respondent company's plantation were not necessary or desirable to its
business, we affirm the public respondent's finding that all of the complainants (petitioners) have rendered non-
continuous or broken service for more than one (1) year and are consequently considered regular employees.4

We do not sustain public respondent's theory that private respondent should not be made to compensate petitioners
for backwages because its termination of their employment was not made in bad faith. The act of hiring and re-hiring
the petitioners over a period of time without considering them as regular employees evidences bad faith on the part
of private respondent. The public respondent made a finding to this effect when it stated that the subsequent
rehiring of petitioners on a probationary status "clearly appears to be a convenient subterfuge on the part of
management to prevent complainants (petitioners) from becoming regular employees."5

Reliance by public respondent on the case of Manila Electric Company vs. NLRC6 is misplaced. In that case, the
Court ordered the reinstatement of an employee, without backwages because, although there was a valid cause for
dismissal, the penalty was too severe for an employee who had rendered service for an uninterrupted period of
twenty (20) years with two commendations for honesty. In the case at bar, there is no valid cause for dismissal. The
employees (petitioners) have not performed any act to warrant termination of their employment. Consequently,
petitioners are entitled to their full backwages and other benefits from the time their compensation was withheld from
them up to the time of their actual reinstatement.

WHEREFORE, the Resolution of the National Labor Relations Commission dated 3 May 1993 is modified in that its
deletion of the award for backwages in favor of petitioners, is SET ASIDE. The decision of the Labor Arbiter dated
26 April 1991 is AFFIRMED with the modification that backwages shall be paid to petitioners from the time of their
illegal dismissal on 25 June 1990 up to the date of their reinstatement. If reinstatement is no longer feasible, a one-
month salary shall be paid the petitioners as ordered in the labor arbiter's decision; in addition to the adjudged
backwages.

SO ORDERED.

Bellosillo, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.

Footnotes

1 Rollo, pp. 37-38.

2 Rollo, p. 71.

3 G.R. No. 71664, 28 February 1992, 206 SCRA 643, citing the case of De Leon vs. NLRC, G.R. No. 70705,
21 August 1989, 176 SCRA 615.

4 Rollo, p. 70.

5 Rollo, p. 71.

6 G.R. No. 78763, 12 July 1989, 175 SCRA 277.

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