Was private respondent a regular employee at the time his employment was terminated?

Asserting their right to terminate the contract with private respondent per the “Kasunduan” with him, petitioners pointed to the provision thereof stating that he was being employed    only on a ‘’por viaje’’ basis and that his employment would be terminated at the end of the trip for which he was being hired, to wit:

NA, kami ay sumasang-ayon na MAGLINGKOD at GUMAWA ng mga gawaing magmula sa pag-alis ng lantsa sa pondohan sa Navotas patungo sa palakayahan; pabalik sa pondohan ng lantsa sa Navotas hanggang sa  paghango ng mga kargang isda.

Petitioners lament that fixed-term employment contracts are recognized as valid under the law notwithstanding the provision of Article 280 of the Labor Code. Petitioners theorize that the Civil Code has always recognized the validity of contracts with a fixed and definite period, and imposes no restraints on the freedom of the parties to fix the duration of the contract, whatever its object, be it species, goods or services, except the general admonition against stipulations contrary to law, morals, good customs, public order and public policy.  Quoting Brent School Inc. v. Zamora, petitioners are hamstrung on their reasoning that under the Civil Code, fixed-term employment contracts are not limited, as they are under the present Labor Code, to those that by their nature are seasonal or for specific projects with pre-determined dates of completion as they also include those to which the parties by free choice have assigned a specific date of termination.  Hence, persons may enter into such contracts as long as they are capacitated to act, petitioners bemoan.

We are far from persuaded by petitioners’ ratiocination.

Petitioners’ construal of Brent School, Inc. v. Zamora, has certainly gone astray. The subject of scrutiny in the Brent case was the employment contract inked between the school and one engaged as its Athletic Director. The contract fixed a specific term of five years from the date of execution of the agreement. This Court upheld the validity of the contract between therein petitioner and private respondent, fixing the latter’s period of employment.  This Court laid down the following criteria for judging the validity of such fixed-term contracts, to wit:

Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the employee’s right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has singled out:  agreements entered into precisely to circumvent security of tenure.  It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter.  Unless thus limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences. (Emphasis supplied.)

Brent cited some familiar examples of employment contracts which may neither be for seasonal work nor for specific projects, but to which a fixed term is an essential and natural appurtenance, i.e., overseas employment contracts, appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in educational institutions, which are by practice or tradition rotated among the faculty members, and where fixed terms are a necessity without which no reasonable rotation would be possible.  Thus, in Brent, the acid test in considering fixed-term contracts as valid is: if from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be disregarded for being contrary to public policy.

On the same tack as Brent, the Court in Pakistan International Airlines Corporation v. Ople, ruled in this wise:

It is apparent from Brent School that the critical consideration is the presence or absence of a substantial indication that the period specified in an employment agreement was designed to circumvent the security of tenure of regular employees which is provided for in Articles 280 and 281 of the Labor Code.  This indication must ordinarily rest upon some aspect of the agreement other than the mere specification of a fixed term of the employment agreement, or upon evidence aliunde of the intent to evade.

Consistent with the pronouncements in these two earlier cases, the Court, in Cielo v. National Labor Relations Commission, did not hesitate to nullify employment contracts stipulating a fixed term after finding that “the purpose behind these individual contracts was to evade the application of the labor laws.

In the case under consideration, the agreement has such an objective – to frustrate the security of tenure of private respondent- and fittingly, must be nullified. In this case, petitioners’ intent to evade the application of Article 280 of the Labor Code is unmistakable. In a span of 12 years, private respondent worked for petitioner company first as a Chief Mate, then Boat Captain, and later as Radio Operator. His job was directly related to the deep-sea fishing business of petitioner Poseidon.  His work was, therefore, necessary and important to the business of his employer.  Such being the scenario involved, private respondent is considered a regular employee of petitioner under Article 280 of the Labor Code, the law in point, which provides:

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 fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.

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

Moreover, unlike in the Brent case where the period of the contract was fixed and clearly stated, note that in the case at bar, the terms of employment of private respondent as provided in the Kasunduan was not only vague, it also failed to provide an actual or specific date or period for the contract.  As adroitly observed by the Labor Arbiter:

There is nothing in the contract that says complainant, who happened to be the captain of said vessel, is a casual, seasonal or a project worker. The date July 1 to 31, 1998 under the heading “Pagdating” had been placed there merely to indicate the possible date of arrival of the vessel and is not an indication of the status of employment of the crew of the vessel.

Actually, the exception under Article 280 of the Labor Code in which the respondents have taken refuge to justify its position does not apply in the instant case. The proviso, “Except where the employment has been fixed for a specific project or undertaking the completion or determination 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.” (Article 280 Labor Code), is inapplicable because the very contract adduced by respondents is unclear and uncertain. The kasunduan does not specify the duration that complainant had been hired x x x. (Emphasis supplied.)

Furthermore, as petitioners themselves admitted in their petition before this Court, private respondent was repeatedly hired as part of the boat’s crew and he acted in various capacities onboard the vessel. In Integrated Contractor and Plumbing Works, Inc. v. National Labor Relations Commission, we held that the test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer.  And, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. 

In Bustamante v. National Labor Relations Commission, the Court expounded on what are regular employees under Article 280 of the Labor Code, viz:

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 fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.

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

Ostensibly, in the case at bar, at different times, private respondent occupied the position of Chief Mate, Boat Captain, and Radio Operator. In petitioners’ interpretation, however, this act of hiring and re-hiring actually highlight private respondent’s contractual status saying that for every engagement, a fresh contract was entered into by the parties at the outset as the conditions of employment changed when the private respondent filled in a different position.  But to this Court, the act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent.  Such pattern of re-hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners’ business or trade.

Petitioners would brush off private respondent’s length of service by stating that he had worked for the company merely for several years and that in those times, his services were not exclusive to petitioners.  On the other hand, to prove his claim that he had continuously worked for petitioners from 1988 to 2000, private respondent submitted a copy of his payroll from 30 May 1988 to October 1988 and a copy of his SSS Employees Contributions as of the year 2000.  These documents were submitted by private respondent in order to benchmark his claim of 12 years of service.   Petitioners, however, failed to submit the pertinent employee files, payrolls, records, remittances and other similar documents  which  would show that private respondent’s work was not continuous and for less than 12 years.  Inasmuch as these documents are not in private respondent’s possession but in the custody and absolute control of petitioners, their failure to refute private respondent’s evidence or even categorically deny private respondent’s allegations lead us to no other conclusion than that private respondent was hired in 1988 and had been continuously in its employ since then. Indeed, petitioners’ failure to submit the necessary documents, which as employers are in their possession, gives rise to the presumption that their presentation is prejudicial to its cause.

To recapitulate, it was after 12 long years of having private respondent under its wings when petitioners, possibly sensing a brewing brush with the law as far as private respondent’s employment is concerned, finally found a loophole to kick private respondent out when the latter failed to properly record a 7:25 a.m. call.  Capitalizing on this faux pas, petitioner summarily dismissed private respondent. On this note, we disagree with the finding of the NLRC that private respondent was negligent on account of his failure to properly record a call in the log book.  A review of the records would ineluctably show that there is no basis to deduct six months’ worth of salary from the total separation pay that private respondent is entitled to. We note further that the NLRC’s finding clashes with that of the Labor Arbiter which found no such negligence and that such inadvertence on the part of private respondent, at best, constitutes simple negligence punishable only with admonition or suspension for a day or two.

As the records bear out, private respondent himself seasonably realized his oversight and in no time recorded the 7:25 a.m. call after the 7:30 a.m. call. Gross negligence under Article 282 of the Labor Code,  as amended, connotes want of care in the performance of one’s duties, while habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances.  Here, it is not disputed that private respondent corrected straight away the recording of the call and petitioners failed to prove the damage or injury that such inadvertence caused the company. We find, as the Labor Arbiter had found, that there is no sufficient evidence on record to prove private respondent’s negligence, gross or simple for that matter, in the performance of his duties to warrant a reduction of six months salary from private respondent’s separation pay.  Moreover, respondent missed to properly record, not two or three calls, but just a single call. It was also a first infraction on the part of private respondent, not to mention that the gaffe, if at all, proved to be innocuous. Thus, we find such slip to be within tolerable range. After all, is it not a rule that in carrying out and interpreting the provisions of the Labor Code and its implementing regulations, the workingman’s welfare should be primordial?

Petitioners next assert that deep-sea fishing is a seasonal industry because catching of fish could only be undertaken for a limited duration or seasonal within a given year. Thus, according to petitioners, private respondent was a seasonal or project employee.

We are not won over.

As correctly pointed out by the Court of Appeals, the “activity of catching fish is a continuous process and could hardly be considered as seasonal in nature.”  In Philex Mining Corp. v. National Labor Relations Commission, we defined project employees as those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project has been determined at the time of the engagement of the employee. The principal test for determining whether particular employees are “project employees” as distinguished from “regular employees,” is whether or not the “project employees” were assigned to carry out a “specific project or undertaking,” the duration and scope of which were specified at the time the employees were engaged for that project.  In this case, petitioners have not shown that private respondent was informed that he will be assigned to a “specific project or undertaking.”  As earlier noted, neither has it been established that he was informed of the duration and scope of such project or undertaking at the time of their engagement.

More to the point, in Maraguinot, Jr. v. National Labor Relations Commission, we ruled that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee.

In fine, inasmuch as private respondent’s functions as described above are no doubt “usually necessary or desirable in the usual business or trade” of petitioner fishing company and he was hired continuously for 12 years for the same nature of tasks, we are constrained to say that he belongs to the ilk of regular employee.  Being one, private respondent’s dismissal without valid cause was illegal. And, where illegal dismissal is proven, the worker is entitled to back wages and other similar benefits without deductions or conditions.

Indeed, it behooves this Court to be ever vigilant in checking the unscrupulous efforts of some of our entrepreneurs, primarily aimed at maximizing their return on investments at the expense of the lowly workingman.

WHEREFORE, the present petition is hereby DENIED.  The Decision of the Court of Appeals dated 14 March 2005 in CA-G.R. SP No. 81140 is hereby AFFIRMED WITH MODIFICATION by deleting the reduction of an amount equivalent to six months of pay from private respondent’s separation pay.  The case is remanded to the Labor Arbiter for further proceedings solely for the purpose of determining the monetary liabilities of petitioners in accordance with the decision. The Labor Arbiter is ORDERED to submit his compliance thereon within thirty (30) days from notice of this decision, with copies furnished to the parties.  Costs against petitioners.

SO ORDERED.

SOURCE: [ G.R. NO. 168052, February 20, 2006 ]POSEIDON FISHING/TERRY DE JESUS, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION AND JIMMY S. ESTOQUIA, RESPONDENTS. TAGS: conversion hearing trial illegal drugs trial lawyer business corporate lawyer labor lawyer immigration law bureau of immigration cebu 9g visa search warrant warrant of arrest motion to quash information complaint police officers buy bust physical suffering shocked horrified mental anguish fright serious anxiety besmirched reputation sleepless nights wounded feelings moral shock social humiliation similar injuries Real Estate Broker nominal damages Sales Agent Properties for Sale Looking for Buyers Design Build House and Lot for Sale for Rent Talisay City Mandaue City Lapu Lapu Lapu-Lapu City Yncierto Sesante Villanueva Ruz Jan Edmond Marc Tim Timothy temperate damages Luz liquidated damages Kristin tct transfer certificate of title tax declaration birth certificate relocation survey surveying judicial titling administrative titling patent title denr cenro foreshore lease ecc environmental compliance certificate design build architect cebu engineer interior design designer residential commercial cebu property warehouse for rent for lease marc Christian yncierto ruz jan Edmond yncierto ruz Kristin Villanueva ruz Edmond mabalot ruz marriage certificate timber land forest land watershed agricultural lot land use Alcantara Alcoy moral damages Alegria actual damages Aloguinsan Argao Asturias Badian Balamban Bantayan Barili Boljoon Borbon Carmen Catmon Compostela Consolacion Cordova Daanbantayan Dumaguete Bais Sibulan Tampi Bacong Negros Bacolod Separation pay Resign Resignation Back wages Backwages Length of service pay benefit employee employer relationship Silay Kabankalan Daan Bantayan Dalaguete Dumanjug Ginatilan Liloan compensatory damages Madridejos Malabuyoc Medellin Minglanilla Moalboal Oslob Pilar Pinamungajan Poro Ronda Samboan San Fernando San Francisco San Remigio Sante Fe Santander Sibonga Sogod Tabogon Tabuelan Tuburan attorney’s fees Tudela exemplary damages Camotes General Luna Siargao Cagayan Davao Kidapawan Attorney Abogado Lawyer Architect

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