Please prepare a digest on the following three (3) cases relative to

the matter of ENDO and in line with the discussion on the

jurisdiction of Labor Arbiters under the 2011 NLRC Rules of
Procedure as Amended v. the doctrine laid down in Bombo Radyo
Philippines: 1. Pangilinan et al. v. General Milling Corporation, July
12, 2004; 2. Pure Food Corp. v. NLRC, December 12, 2007; 3.
Samonte et al v. La Salle Greenhills, February 10, 2016.

G.R.No.149329,July12,2004Pangilinanvs.GeneralMilling

Facts:

GeneralMillingCorporationisadomesticcorporationengagedintheproductionand
saleoflivestockandpoultryandislikewisethedistributorofdressedchickentovarious
restaurantsandestablishmentsnationwide.Itemployshundredsofemployees,someona
regularbasisandothersonacasualbasis,asemergencyworkers.Petitionersinthis
casewereemployedbyGMCondifferentdatesasemergencyworkersunderseparate
temporary/casualcontractsofemploymentforaperiodoffivemonths.Uponthe
expirationoftheirrespectivecontracts,theirserviceswereterminated.Theylaterfiled
separatecomplaintsforillegaldismissalandnonpaymentofparticularfees.Petitioners
allegethatthereworkaschickendresserswasnecessaryanddesirableintheusual
businessofGMC.Theystressedthatbasedonthenatureoftheirwork,theywereregular
employeesoftherespondent,andthereforetheycouldnotbedismissedfromtheir
employmentunlessforjustcaseandafterduenotice.Theymadefurtherassertionsthat
GMCterminatedtheircontractofemploymentwithoutjustcauseandduenoticeandthat
GMCcouldnotrelyonthenomenclatureoftheiremploymentastemporarycasual.
TheLaborArbiterruledinfavourofthepetitioners,holdingthattheywereregular
employeesandthattheywereillegallydismissed.UponappealtotheNLRC,thelatter
reversedthedecisionoftheLaborArbiterandheldthatthepetitioner,whowere
temporaryorcontractualemployeeswerelegallyterminatedupontheexpirationoftheir
respectivecontracts,citingthecaseofBrentSchool,Inc.vsZamorawhereitwasheld
thatwhilepetitionersworkwasnecessaryanddesirableintheusualbusinessofGMC,
theycannotbeconsideredasregularemployeesforhavingagreedtoafixedterm.The
CourtofAppealsaffirmedthedecisionoftheNLRC.

Issue:WONthepetitionerswereregularemployeesofGMCwhentheiremploymentwas
terminated?

Held:
No.Thepetitionerswereemployeeswithafixedperiod,and,assuch,werenotregular
employees.Therearetwoseparateinstanceswherebyitcanbedeterminedthatan
employmentisregular:(1)iftheparticularactivityperformedbytheemployeeis
necessaryordesirableintheusualbusinessortradeofthe

employer;and(2)iftheemployeehasbeenperformingthejobforatleastayear.Inthe
caseofSt.TheresasSchoolofNovalichesFoundationvsNLRC,itwasheldthatArticle
280oftheLaborCodedoesnotproscribeorprohibitanemploymentcontractwitha
fixedperiod.Itdoesnotnecessarilyfollowthatwherethedutiesoftheemployeeconsist
ofactivitiesusuallynecessaryordesirableintheusualbusinessoftheemployer,the
partiesareforbiddenfromagreeingonaperiodoftimefortheperformanceofsuch
activities.

Recordsrevealthatthestipulationsintheemploymentcontractswereknowinglyand
voluntarilyagreedtobythepetitionerswithoutforce,duressorimproperpressure,orany
circumstancesthatvitiatedtheirconsent.Whilethepetitionersemploymentaschicken
dressersisnecessaryanddesirableintheusualbusinessoftherespondent,theywere
employedonameretemporarybasis,sincetheiremploymentwaslimitedtoafixed
period.Assuch,theycannotbesaidtoberegularemployees,butaremerelycontractual
employees.Consequently,therewasnoillegaldismissalwhentheirserviceswere
terminated.Lackofnoticeofterminationisofnoconsequence,becausetheitwas
specifiedinthecontractwhenitshallexpire.

Purefoods v. NLRC 283 SCRA 136 [1997]

Facts:

The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work for a
fixed period of five months at its tuna cannery plant. After the expiration of their respective contracts of
employment, their services were terminated. They thenexecuted a Release and Quitclaim stating that
they had no claim whatsoever against Pure Foods. The private respondents filed before the NLRC Sub-
Regional Arbitration Branch, a complaint for illegal dismissal against the petitioner and its plant manager.

Pure Foods Corp submits that the private respondents are now estopped from questioning their
separation from petitioners employ in view of their express conformity with the five-month duration of their
employment contracts. Besides, they fell within the exception provided in Article 280 of the Labor Code
which reads: [E]xcept 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.

Moreover, the first paragraph of the said article must be read and interpreted in conjunction with the
proviso in the second paragraph, which reads: 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.... In the instant case, the private
respondents were employed for a period of five months only. In any event, private respondents' prayer for
reinstatement is well within the purview of the Release and Quitclaim they had executed wherein they
unconditionally released the petitioner from any and all other claims which might have arisen from their
past employment with the petitioner.

The private respondents, on the other hand, argue that contracts with a specific period of employment
may be given legal effect provided, however, that they are not intended to circumvent the constitutional
guarantee on security of tenure. They submit that the practice of the petitioner in hiring workers to work
for a fixed duration of five months only to replace them with other workers of the same employment
duration was apparently to prevent the regularization of these so-called casuals, which is a clear
circumvention of the law on security of tenure.

Issue:

Whether employees hired for a definite period and whose services are necessary and desirable in the
usual business or trade of the employer are regular employees.

Ruling: We find the petition devoid of merit.

Article 280 of the Labor Code defines regular and casual employment as follows: ART. 280. Regular and
Casual Employment.-- The provisions of written agreement to the contrary notwithstanding and
regardless of the oral argument 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.

Thus, the two kinds of regular employees are (1) those who are engaged to perform activities which are
necessary or desirable in the usual business or trade of the employer; and (2) those casual employees
who have rendered at least one year of service, whether continuous or broken, with respect to the activity
in which they are employed.

In the instant case, the private respondents activities consisted in the receiving, skinning, loining,
packing, and casing-up of tuna fish which were then exported by the petitioner. Indisputably, they were
performing activities which were necessary and desirable in petitioners business or trade.

xxx

Contrary to petitioner's submission, the private respondents could not be regarded as having been hired
for a specific project or undertaking. The term specific project or undertaking under Article 280 of the
Labor Code contemplates an activity which is not commonly or habitually performed or such type of work
which is not done on a daily basis but only for a specific duration of time or until completion; the services
employed are then necessary and desirable in the employers usual business only for the period of time it
takes to complete the project.

The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that
performed by those whose contracts had expired negates petitioners contention that those workers were
hired for a specific project or undertaking only.

xxx

Where from the circumstances it is apparent that the periods have been imposed to preclude acquisition
of tenurial security by the employee, they should be struck down or disregarded as contrary to public
policy and morals.

xxx

...criteria under which term employment cannot be said to be in circumvention of the law on security of
tenure:1) The fixed period of employment was knowingly and voluntarily agreed upon 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; or2) It satisfactorily appears that the employer and the
employee dealt with each other on more or less equal terms with no moral dominance exercised by the
former or the latter.

None of these criteria had been met in the present case.

This scheme of the petitioner was apparently designed to prevent the private respondents and the other
casual employees from attaining the status of a regular employee. It was a clear circumvention of the
employees right to security of tenure and to other benefits like minimum wage, cost-of-living allowance,
sick leave, holiday pay, and 13th month pay. Indeed, the petitioner succeeded in evading the application
of labor laws. Also, it saved itself from the trouble or burden of establishing a just cause for terminating
employees by the simple expedient of refusing to renew the employment contracts.

The five-month period specified in private respondents employment contracts having been imposed
precisely to circumvent the constitutional guarantee on security of tenure should, therefore, be struck
down or disregarded as contrary to public policy or morals

FIRST DIVISION
[G.R. No. 122653. December 12, 1997]
PURE FOODS CORPORATON, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,
RODOLFO CORDOVA, VIOLETA CRUSIS, ET AL.,* respondents.
DECISION
DAVIDE, JR., J.:
The crux of this petition for certiorari is the issue of whether employees hired for a definite period and
whose services are necessary and desirable in the usual business or trade of the employer are regular
employees.
The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work for a
fixed period of five months at its tuna cannery plant in Tambler, General Santos City. After the expiration of
their respective contracts of employment in June and July 1991, their services were terminated. They
forthwith executed a Release and Quitclaim stating that they had no claim whatsoever against the
petitioner.
On 29 July 1991, the private respondents filed before the National Labor Relations Commission (NLRC)
Sub-Regional Arbitration Branch No. XI, General Santos City, a complaint for illegal dismissal against the
petitioner and its plant manager, Marciano Aganon. This case was docketed as RAB-11-08-50284-91.
On 23 December 1992, Labor Arbiter Arturo P. Aponesto handed down a decision dismissing the
complaint on the ground that the private respondents were mere contractual workers, and not regular
employees; hence, they could not avail of the law on security of tenure. The termination of their services
by reason of the expiration of their contracts of employment was, therefore, justified. He pointed out that
earlier he had dismissed a case entitled Lakas ng Anak-Pawis- NOWM v. Pure Foods Corp. (Case No.
RAB-11-02-00088-88) because the complainants therein were not regular employees of Pure Foods, as
their contracts of employment were for a fixed period of five months. Moreover, in another case involving
the same contractual workers of Pure Foods (Case No. R-196-ROXI- MED- UR-55-89), then Secretary of
Labor Ruben Torres held, in a Resolution dated 30 April 1990, that the said contractual workers were not
regular employees.
The Labor Arbiter also observed that an order for private respondents reinstatement would result in the
reemployment of more than 10,000 former contractual employees of the petitioner. Besides, by executing
a Release and Quitclaim, the private respondents had waived and relinquished whatever right they might
have against the petitioner.
The private respondents appealed from the decision to the National Labor Relations Commission (NLRC),
Fifth Division, in Cagayan de Oro City, which docketed the case as NLRC CA No. M-001323-93.
On 28 October 1994, the NLRC affirmed the Labor Arbiter's decision. However, on private respondents
motion for reconsideration, the NLRC rendered another decision on 30 January 1995 vacating and setting
aside its decision of 28 October 1994 and holding that the private respondents and their co-complainants
were regular employees. It declared that the contract of employment for five months was a clandestine
scheme employed by [the petitioner] to stifle [private respondents] right to security of tenure and should
therefore be struck down and disregarded for being contrary to law, public policy, and morals. Hence, their
dismissal on account of the expiration of their respective contracts was illegal.
Accordingly, the NLRC ordered the petitioner to reinstate the private respondents to their former position
without loss of seniority rights and other privileges, with full back wages; and in case their reinstatement
would no longer be feasible, the petitioner should pay them separation pay equivalent to one-month pay
or one-half-month pay for every year of service, whichever is higher, with back wages and 10% of the
monetary award as attorneys fees.
Its motion for reconsideration having been denied, the petitioner came to this Court contending that
respondent NLRC committed grave abuse of discretion amounting to lack of jurisdiction in reversing the
decision of the Labor Arbiter.
The petitioner submits that the private respondents are now estopped from questioning their separation
from petitioners employ in view of their express conformity with the five-month duration of their
employment contracts. Besides, they fell within the exception provided in Article 280 of the Labor Code
which reads: [E]xcept 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.
Moreover, the first paragraph of the said article must be read and interpreted in conjunction with the
proviso in the second paragraph, which reads: 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.... In the instant case, the private
respondents were employed for a period of five months only. In any event, private respondents' prayer for
reinstatement is well within the purview of the Release and Quitclaim they had executed wherein they
unconditionally released the petitioner from any and all other claims which might have arisen from their
past employment with the petitioner.
In its Comment, the Office of the Solicitor General (OSG) advances the argument that the private
respondents were regular employees, since they performed activities necessary and desirable in the
business or trade of the petitioner. The period of employment stipulated in the contracts of employment
was null and void for being contrary to law and public policy, as its purpose was to circumvent the law on
security of tenure. The expiration of the contract did not, therefore, justify the termination of their
employment.
The OSG further maintains that the ruling of the then Secretary of Labor and Employment in LAP-NOWM
v. Pure Foods Corporation is not binding on this Court; neither is that ruling controlling, as the said case
involved certification election and not the issue of the nature of private respondents employment. It also
considers private respondents quitclaim as ineffective to bar the enforcement for the full measure of their
legal rights.
The private respondents, on the other hand, argue that contracts with a specific period of employment
may be given legal effect provided, however, that they are not intended to circumvent the constitutional
guarantee on security of tenure. They submit that the practice of the petitioner in hiring workers to work
for a fixed duration of five months only to replace them with other workers of the same employment
duration was apparently to prevent the regularization of these so-called casuals, which is a clear
circumvention of the law on security of tenure.
We find the petition devoid of merit.
Article 280 of the Labor Code defines regular and casual employment as follows:
ART. 280. Regular and Casual Employment.-- The provisions of written agreement to the contrary
notwithstanding and regardless of the oral argument 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.
Thus, the two kinds of regular employees are (1) those who are engaged to perform activities which are
necessary or desirable in the usual business or trade of the employer; and (2) those casual employees
who have rendered at least one year of service, whether continuous or broken, with respect to the activity
in which they are employed.
In the instant case, the private respondents activities consisted in the receiving, skinning, loining, packing,
and casing-up of tuna fish which were then exported by the petitioner. Indisputably, they were performing
activities which were necessary and desirable in petitioners business or trade.
Contrary to petitioner's submission, the private respondents could not be regarded as having been hired
for a specific project or undertaking. The term specific project or undertaking under Article 280 of the
Labor Code contemplates an activity which is not commonly or habitually performed or such type of work
which is not done on a daily basis but only for a specific duration of time or until completion; the services
employed are then necessary and desirable in the employers usual business only for the period of time it
takes to complete the project.
The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that
performed by those whose contracts had expired negates petitioners contention that those workers were
hired for a specific project or undertaking only.
Now on the validity of private respondents' five-month contracts of employment. In the leading case of
Brent School, Inc. v. Zamora, which was reaffirmed in numerous subsequent cases, [this Court has upheld
the legality of fixed-term employment. It ruled that the decisive determinant in term employment should
not be the activities that the employee is called upon to perform but the day certain agreed upon by the
parties for the commencement and termination of their employment relationship. But, this Court went on
to say that where from the circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to
public policy and morals.
Brent also laid down the criteria under which term employment cannot be said to be in
circumvention of the law on security of tenure:
1) The fixed period of employment was knowingly and voluntarily agreed upon 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
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less
equal terms with no moral dominance exercised by the former or the latter.
None of these criteria had been met in the present case. As pointed out by the private respondents:
[I]t could not be supposed that private respondents and all other so-called casual workers of [the
petitioner] KNOWINGLY and VOLUNTARILY agreed to the 5-month employment contract. Cannery
workers are never on equal terms with their employers. Almost always, they agree to any terms of an
employment contract just to get employed considering that it is difficult to find work given their ordinary
qualifications. Their freedom to contract is empty and hollow because theirs is the freedom to starve if
they refuse to work as casual or contractual workers. Indeed, to the unemployed, security of tenure has
no value. It could not then be said that petitioner and private respondents "dealt with each other on more
or less equal terms with no moral dominance whatever being exercised by the former over the latter. The
petitioner does not deny or rebut private respondents' averments (1) that the main bulk of its workforce
consisted of its so-called casual employees; (2) that as of July 1991, casual workers numbered 1,835;
and regular employees, 263; (3) that the company hired casual every month for the duration of five
months, after which their services were terminated and they were replaced by other casual employees on
the same five-month duration; and (4) that these casual employees were actually doing work that were
necessary and desirable in petitioners usual business.
As a matter of fact, the petitioner even stated in its position paper submitted to the Labor Arbiter that,
according to its records, the previous employees of the company hired on a five-month basis numbered
about 10,000 as of July 1990. This confirms private respondents allegation that it was really the practice
of the company to hire workers on a uniformly fixed contract basis and replace them upon the expiration
of their contracts with other workers on the same employment duration.
This scheme of the petitioner was apparently designed to prevent the private respondents and the other
casual employees from attaining the status of a regular employee. It was a clear circumvention of the
employees right to security of tenure and to other benefits like minimum wage, cost-of-living allowance,
sick leave, holiday pay, and 13th month pay.Indeed, the petitioner succeeded in evading the application of
labor laws. Also, it saved itself from the trouble or burden of establishing a just cause for terminating
employees by the simple expedient of refusing to renew the employment contracts.
The five-month period specified in private respondents employment contracts having been imposed
precisely to circumvent the constitutional guarantee on security of tenure should, therefore, be struck
down or disregarded as contrary to public policy or morals. To uphold the contractual arrangement
between the petitioner and the private respondents would, in effect, permit the former to avoid hiring
permanent or regular employees by simply hiring them on a temporary or casual basis, thereby violating
the employees security of tenure in their jobs.
The execution by the private respondents of a Release and Quitclaim did not preclude them from
questioning the termination of their services. Generally, quitclaims by laborers are frowned upon as
contrary to public policy and are held to be ineffective to bar recovery for the full measure of the workers
rights.The reason for the rule is that the employer and the employee do not stand on the same footing.
Notably, the private respondents lost no time in filing a complaint for illegal dismissal. This act is hardly
expected from employees who voluntarily and freely consented to their dismissal.
The NLRC was, thus, correct in finding that the private respondents were regular employees and that they
were illegally dismissed from their jobs. Under Article 279 of the Labor Code and the recent jurisprudence,
the legal consequence of illegal dismissal is reinstatement without loss of seniority rights and other
privileges, with full back wages computed from the time of dismissal up to the time of actual
reinstatement, without deducting the earnings derived elsewhere pending the resolution of the case.
However, since reinstatement is no longer possible because the petitioner's tuna cannery plant had,
admittedly, been closed in November 1994, the proper award is separation pay equivalent to one month
pay or one-half month pay for every year of service, whichever is higher, to be computed from the
commencement of their employment up to the closure of the tuna cannery plant. The amount of back
wages must be computed from the time the private respondents were dismissed until the time petitioner's
cannery plant ceased operation.
WHEREFORE, for lack of merit, the instant petition is DISMISSED and the challenged decision of
30 January 1995 of the National Labor Relations Commission in NLRC CA No. M-001323-93 is hereby
AFFIRMED subject to the above modification on the computation of the separation pay and back wages.
SO ORDERED.
Bellosillo, Vitug, and Kapunan, JJ., concur.

[ G.R. No. 199683, February 10, 2016 ]ARLENE T. SAMONTE, et al., petitioners, vs. LSGH, BRO.
BERNARD S. OCA, respondents.

FACTS:

From 1989, La Salle Greenhills, Inc. (LSGI) contracted the services of medical professionals, specifically
pediatricians, dentists and a physician, to comprise its Health Service Team (HST). Petitioners, along with
other members of the HST signed uniform one-page Contracts of Retainer for the period of a specific
academic cal~ndar beginning in June of a certain year (1989 and the succeeding 15 years) and
terminating in March of the following year when the school year ends. After fifteen consecutive years of
renewal each academic year, where the last Contract of Retainer was for the school year of 2003-2004,
LSGI Head Administrator, on that last day of the school year, informed the Medical Service Team,
including herein petitioners, that their contracts will no longer be renewed for the following school year by
reason of LSGI's decision to hire two (2) full-time doctors and dentists. When petitioners', along with their
medical colleagues', requests for payment of their separation pay were denied, they filed a complaint for
illegal dismissal with prayer for separation pay, damages and attorney's fees before the NLRC. They
alleged that they were regular employees who could only be dismissed for just and authorized causes

LSGI denied that complainants were regular employees, asserting: that complainants were independent
contractors who were retained by LSGI by reason of their medical skills and expertise to provide ancillary
medical and dental services; that LSGI had no power to impose disciplinary measures upon complainants
including dismissal from employment; and that LSGI had no power of control over how complainants
actually performed their professional services.

The LA dismissied petitioners complaint, but the NLRC reversed. On appeal, the CA ruled against
petitioners.

ISSUE:

Whether or not the CA correctly ruled that the NLRC did not commit grave abuse of discretion in ruling
that petitioners were not regular employees who may only be dismissed for just and authorized causes.

RULING:

NO. In the case at bar, the CA disregarded the repeated renewals of the Contracts of Retainer of
petitioners spanning a decade and a half. While vague in its sparseness, the Contract of Retainer very
clearly spelled out that LSGI had the power of control over petitioners. It is enough that the employer has
the right to wield that power. In all, given the following: ( 1) repeated renewal of petitioners' contract for
fifteen years, interrupted only by the close of the school year; (2) the necessity of the work performed by
petitioners as school physicians ~and dentists; and (3) the existence of LSGI's power of control over the
means and method pursued by petitioners in the performance of their job, we rule that petitioners attained
regular employment, entitled to security of tenure who could only be dismissed for just and authorized
causes. Consequently, petitioners were illegally dismissed and are entitled to the twin remedies of
payment of separation pay and full back wages. We order separation pay in lieu of reinstatement given
the time that has lapsed, twelve years, in the litigation of this case.

Petition granted.

THIRD DIVISION
G.R. No. 199683, February 10, 2016
ARLENE T. SAMONTE, VLADIMIR P. SAMONTE, MA. AUREA S. ELEPANO,
Petitioners, v. LA SALLE GREENHILLS, INC., BRO. BERNARD S. OCA,
Respondents.
DECISION
PEREZ, J.:
As each and all of the various and varied classes of employees in the gamut of the
labor force, from non-professionals to professionals, are afforded full protection of
law and security of tenure as enshrined in the Constitution, the entitlement is
determined on the basis of the nature of the work, qualifications of the employee,
and other relevant circumstances.

Assailed in this petition for review on certiorari is the Decision1 of the Court of
Appeals in C.A. G.R. SP No. 110391. affirming the Decision of the National Labor
Relations Commission (NLRC) in NLRC CA No. 044835-05 2 finding that petitioners
Arlene T. Samonte, Vladimir P. Samonte and Ma. Aurea S. Elepano were fixed-term
employees of respondent La Salle Greenhills, Inc. (LSGI). The NLRC (First Division)
ruling is a modification of the ruling of the Labor Arbiter that petitioners were
independent contractors of respondent LSGI.3

The facts are not in dispute.

From 1989, and for fifteen (15) years thereafter, LSGI contracted the services of
medical professionals, specifically pediatricians, dentists and a physician, to
comprise its Health Service Team (HST).

Petitioners, along with other members of the HST signed uniform one-page
Contracts of Retainer for the period of a specific academic calendar beginning in
June of a certain year (1989 and the succeeding 15 years) and terminating in March
of the following year when the school year ends. The Contracts of Retainer
succinctly read, to wit: C O N T R A C T O F R E T A I N E R

Name of Retainer _________________________________________

Address_________________________________________________
Community Tax Cert. No.__________________________________
Issued at_______________ on ____________________________
Taxpayer Identification No. (TIN)_________________
Department Assigned to________ HRD-CENTRO Operation___________
Project/Undertaking (Description and Duration)
____________ Health Services__________________
Job Task (Description and Duration)
School [physician] from June 1, [x x x] to March 31, [x x x]
Rate__________________

Conditions:

1. This retainer is only temporary in character and, as above specified, shall be

solely and exclusively limited to the project/undertaking and/ or to the job/task
assigned to the retainer within the said project/undertaking;

2. This retainer shall, without need of any notice to the retainer, automatically
cease on the aforespecified expiration date/s of the said project/undertaking and/or
the said job/task; provided, that this retainer shall likewise be deemed terminated
if the said project/undertaking and/or fob/task shall be completed on a date/s priot
to their aforespecified expiration date/s;

3. The foregoing notwithstanding, at any time prior to said expiration or completion

date/s, La Salle Greenhills, Inc. may upon prior written notice to the retainer,
terminate this contract should the retainer fail in any way to perform his assigned
job/task to the satisfaction of La Salle Greenhills, Inc. or for any other just cause.

HERMAN G. ROCHESTER _____________________

Head Administrator Retainer

BELEN T. MASILUNGAN _____________________

Personnel Officer Date Signed

Signed in the Presence of:

DANTE M. FERRER BRO. BERNARD S. OCA

FRD Head Administrator President4
After fifteen consecutive years of renewal each academic year, where the last
Contract of Retainer was for the school year of 2003-2004 i.e., June 1, 2003 to
March 31, 2004, LSGI Head Administrator, Herman Rochester, on that last day of
the school year, informed the Medical Service Team, including herein petitioners,
that their contracts will no longer be renewed for the following school year by
reason of LSGI's decision to hire two (2) full-time doctors and dentists. One of the
physicians from the same Health Service Team was hired by LSGI as a full-time
doctor.

When petitioners', along with their medical colleagues', requests for

payment of their separation pay were denied, they filed a complaint for illegal
dismissal with prayer for separation pay, damages and attorney's fees before the
NLRC. They included the President of LSGI, Bro. Bernard S. Oca, as respondent.

In their Position Paper, petitioners alleged that they were regular employees who
could only be dismissed for just and authorized causes, who, up to the time of their
termination, regularly received the following amounts:

1. Monthly salary for the ten-month period of a given school year:

Name Monthly Salary

a) Jennifer A. Ramirez Php 20,682.73

b) Brandon D. Ericta 28,603.62

c) [Petitioner] Arlene T. Samonte 20,682.73

d) [Petitioner] Vladimir P. Samonte 20,682.73

e) Alma S. Resurrecion 12,700.83

f) Ma. Socorro A. Salazar 21,117.00

g) [Petitioner] Ma. Aurea S. Elepano 8,429.43

2. Annual 13th Month Pay equivalent to their one month salary;

3. Automatic yearly increase to their monthly salary, the rate of which is

discretionary to LSGFs Executive Administrator based on a comparative rate to the
across the board increase of the regular school employees which increase was
subsequently reflected in their [HST'S] monthly salaries for the following school
year;

4. Since 1996, as a result of the HST's request for a performance bonus, the team
was likewise evaluated for a year-end performance rating by HRD- CENTRO Head
Administrator, the Assistant Principal, the Health Services Team Leader and the
designated Physician's Coordinator, complainant Jennifer Ramirez.

To further bolster their claim of regular employment, complainants pointed out the
following in their Position Paper:
In the course of their employment, each of the complainants served an average of
nine hours a week. But beyond their duty hours, they were on call for any medical
exigencies of the La Sallian community. Furthermore, over the years, additional
tasks were assigned to the complainants and were required to suffer the following
services/activites:

a) To attend staff meetings and to participate in the formulation/adoption of policies

and programs designed to enhance the School services to its constituents and to
upgrade the School's standards. Complainants' involvement in Staff Meetings of the
Health Services Unit of respondent school was a regular activity associated with
personnel who are regular employees of an institution;

b) To participate in various gatherings and activities sponsored by the respondent

school such as the Kabihasnan (the bi-annual school fair), symposiums, seminars,
orientation programs, workshops, lectures, etc., including purely political activities
such as the NAMFREL quick count, of which the respondent school is a staunch
supporter;

c) Participation of the complainants in Medical/Dental Missions in the name of

respondent school;

d) Formulation of the Health Services Unit Manual;

e) Participation in the collation of evaluation of services rendered by the Health

Services Unit, as required for the continuing PAASCU (Philippine Association of
Accredited Schools Colleges & Universities) accreditation of the School;

f) Participation in the yearly evaluation of complainants, which is a

function of regular employees in the HRD-CENTRO Operations, of the HRD-CENTRO

Head Administrator;

g) Designation of certain complainants, particularly Dr. Jennifer A. Ramirez, as

member of panel of investigation to inquire into an alleged misdemeanor of a
regular employee of respondent school; and

h) Regular inspection of the canteen concessionaire and the toilet facilities of the
school premises to insure its high standards of sanitation.

Complainants were likewise included among so-called members of the "LA SALLIAN
FAMILY: Builder of a Culture of Peace," under the heading "Health Services Team" of
the La Salle Green Hills High School Student Handbook 2003-2004. Such public
presentation of the complainants as members of the "LA SALLIAN FAMILY" leaves
no doubt about the intent of respondent school to project complainants as part of
its professional staff.5
ChanRoblesVirtualawlibrary

On the other hand, in their Position Paper,6 LSGI denied that complainants were
regular employees, asserting that complainants were independent contractors who
were retained by LSGI by reason of their medical skills and expertise to provide
ancillary medical and dental services to both its students and faculty, consistent
with the following circumstances:

1. Complainants were professional physicians and dentists on retainer basis, paid

on monthly retainer fees, not regular salaries;

2. LSGI had no power to impose disciplinary measures upon complainants including

dismissal from employment;

3. LSGI had no power of control over how complainants actually performed their
professional services.

In the main, LSGI invoked the case of Sonza v. ABS-CBN7 to justify its stance that
complainants were independent contractors and not regular employees citing, thus:

SONZA contends that ABS-CBN exercised control over the means and methods of
his work.

SONZA's argument is misplaced. ABS-CBN engaged SONZA's services specifically to

co-host the "Mel & Jay" programs. ABS-CBN did not assign any other work to
SONZA. To perform his work, SONZA only needed his skills and talent. How SONZA
delivered his lines, appeared on television, and sounded on radio were outside ABS-
CBN's control. SONZA did not have to render 8 hours of work per day. The
Agreement required SONZA to attend only rehearsals and tapings of the shows, as
well as pre and post-production staff meetings. ABS-CBN could not dictate the
contents of SONZA's script. However, the Agreement prohibited SONZA from
criticising in his shows ABS-CBN or its interests. The clear implication is that SONZA
had a free hand on what to say or discuss in his shows provided he did not attack
ABS-CBN or its interests.

As previously adverted, the Labor Arbiter dismissed petitioners' (and their

colleagues') complaint and ruled that complainants, as propounded by LSGI, were
independent contractors under retainership contracts and never became regular
employees of LSGI. The Labor Arbiter based its over-all finding of the absence of
control by LSGI over complainants on the following points:

1. The professional services provided by complainants, including herein petitioners,

cannot be considered as necessary to LSGI's business of providing primary and
secondary education to its students.

2. The pay slips of complainants are not salaries but professional fees less taxes
withheld for the medical services they provided;

3. Issuance of identification cards to, and the requirement to log the time-in and
time-out of, complainants are not indicia of LSGI's power of control over them but
were only imposed for security reasons and in compliance with the agreed clinic
schedules of complainants at LSGI premises.

4. In contrast to regular employees of LSGI, complainants: (a) were not required to

attend or participate in school-sponsored activities and (b) did not enjoy benefits
such as educational subsidy for their dependents. 5. On this score alone,
complainants' respective clinic schedule at LSGI for two (2) to three (3) days a
week for three (3) hours a day, for a maximum of nine (9) hours a week, was not
commensurate to the required number of hours work rendered by a regular
employee in a given week of at least 40 hours a week or 8 hours a day for five (5)
days. In addition, the appointed clinic schedule was based on the preference of
complainants.

Curiously, despite the finding that complainants were independent contractors and
not regular employees, the Labor Arbiter, on the ground of compassionate social
justice, awarded complainants separation pay at the rate of one-half month salary
for every year of service:

Separately, both parties, complainants, including herein petitioners, and

respondents appealed to the NLRC.

At the outset, the NLRC disagreed with the Labor Arbiter's ruling that complainants
were independent contractors based on the latter's opinion that the services
rendered by complainants are not considered necessary to LSGI's operation as an
educational institution. The NLRC noted that Presidential Decree No. 856, otherwise
known as the Sanitation Code of the Philippines, requires that private educational
institutions comply with the sanitary laws. Nonetheless, the NLRC found that
complainants were fixed-period employees whose terms of employment were
subject to agreement for a specific duration. In all, the NLRC ruled that the
Contracts of Retainer between complainants and LSGI are valid fixed-term
employment contracts where complainants as medical professionals understood the
terms thereof when they agreed to such continuously for more than ten (10) years.
Consequently, the valid termination of their retainership contracts at the end of the
period stated therein, did not entitle complainants to reinstatement, nor, to
payment of separation pay.

At this point, only herein petitioners, filed a petition for certiorari under Rule 65 of
the Rules of Court before the Court of Appeals alleging that grave abuse of
discretion attended the ruling of the NLRC that they were not regular employees
and thus not entitled to the twin remedies of reinstatement to work with payment
of full backwages or separation pay with backwages.

In dismissing the petition for certiorari, the appellate court ruled that the NLRC did
not commit an error of jurisdiction which is correctible by a writ of certiorari. The
Court of Appeals found that the NLRC's ruling was based on the Contracts of
Retainer signed by petitioners who, as professionals, supposedly ought to have
known the import of the contracts they voluntarily signed, i.e. (a) temporary in
character; (b) automatically ceasing on the specified expiration date, or (c) likewise
deemed terminated if job/task shall be completed on a date prior to specified
expiration date.

The Court of Appeals ruled against petitioners' claim of regular employment, thus:

Moreover, this Court is not persuaded by petitioners' averments that they are
regular employees simply because they received benefits such as overtime pay,
allowances, Christmas bonuses and the like; or because they were subjected to
administrative rules such as those that regulate their time and hours of work, or
subjected to LSGFs disciplinary rules and regulations; or simply because they were
 treated as part of LSGFs professional staff. It must be emphasised that LSGI, being
the employer, has the inherent right to regulate all aspects of employment of every
employee whether regular, probationary, contractual or fixed-term. Besides,
petitioners were hired for specific tasks and under fixed terms and conditions and it
is LSGI's prerogative to monitor their performance to see if they are doing their
tasks according to the terms and conditions of their contract and to give them
incentives for good performance.8

Hence, this petition for review on certiorari raising the following issues for
resolution of the Court:

I WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT PETITIONERS

WERE FIXED-PERIOD EMPLOYEES AND NOT REGULAR EMPLOYEES OF LSGI.
II
III WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT HAVING RULED THAT
PETITIONERS WERE ILLEGALLY DISMISSED FROM WORK.
IV
V WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT HAVING RULED THAT
PETITIONERS ARE ENTITLED TO REINSTATEMENT, BACKWA'GES AND OTHER
MONETARY BENEFITS PROVIDED BY LAW, MORAL AND EXEMPLARY DAMAGES, AS
WELL AS ATTORNEY'S FEES.
VI
VII WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT HAVING RULED THAT
RESPONDENTS ARE SOLIDARILY LIABLE AS THEY ACTED IN BAD FAITH AND WITH
MALICE IN DEALING WITH THE PETITIONERS.9

The pivotal issue for resolution is whether the Court of Appeals correctly ruled that
the NLRC did not commit grave abuse of discretion in ruling that petitioners were
not regular employees who may only be dismissed for just and authorized causes.

Our inquiry and disposition will delve into the kind of employment relationship
between the parties, such employment relationship having been as much as
admitted by LSGI and then ruled upon categorically by the NLRC and the appellate
court which both held that petitioners were fixed-term employees and not
independent contractors.

Article 280 of the Labor Code classifies employees into regular, project, seasonal,
and casual:

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
service 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.

The provision classifies regular employees into two kinds (1) those "engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer"; and (2) casual employees who have "rendered at least one
year of service, whether such service is continuous or broken."

The NLRC correctly identified the existence of an employer-employee relationship

between petitioners and LSGI and not a bilateral independent contractor
relationship. On more than one occasion, we recognised certain workers to be
independent contractors: individuals with unique skills and talents that set them
apart from ordinary employees.10 We found them to be independent contractors
because of these unique skills and talents and the lack of control over the means
and methods in the performance of their work. In some instances, doctors and
other medical professional may fall into this independent contractor category,
legitimately providing medical professional services. However, as has been declared
by the-NLRC and the appellate court, petitioners herein are not independent
contractors.

We need to examine next the ruling of the NLRC and the Court of Appeals that
petitioners were fixed-term employees.

To factually support such conclusion, the NLRC solely relied on the case of Brent v.
Zamor11 and perfunctorily noted that petitioners, professional doctors and dentists,
continuously signed the contracts for more than ten (10) years. Such was heedless
of our prescription that the ruling in Brent be strictly construed, applying only to
cases where it appears that the employer and employee are on equal footing.
Observably, nowhere in the two and half page ratiocination of the NLRC was there
reference to the standard that "it [should] satisfactorily appear 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 on the latter."

From Brent, which remains as the exception rather than the rule in the
determination of the nature of employment, we are schooled that there are
employment contracts where a "fixed term is an essential and natural
appurtenance" such as overseas employment contracts and officers in educational
institutions. We learned thus:
[T]he decisive determinant in the term employment contract should not be the
activities that the employee is called upon to perform, but the day certain agreed
upon by the parties for the commencement and termination of their employment
relationship, a day certain being understood to be "that which must necessarily
come, although it may not be known when.

xxx
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.

Tersely put, a fixed-term employment is allowable under the Labor Code only if the
term was voluntarily and knowingly entered into by the parties who must have
dealt with each other on equal terms not one exercising moral dominance over the
other.

Indeed, Price, et. al. v. Innodata Corp., teaches us, from the wording of Article 280
of the Labor Code, that the nomenclature of contracts, especially employment
contracts, does not define the employment status of a person: Such is defined and
prescribed by law and not by what the parties say it should be. Equally important to
consider is that a contract of employment is impressed with public interest such
that labor contracts must yield to the common good. Thus, provisions of applicable
statutes are deemed written into the contract, and the parties are not at liberty to
insulate themselves and their relationships from the impact of labor laws and
regulations by simply contracting with each other.

Further, a fixed-term contract is an employment contract, the repeated renewals of

which make for a regular employment. In Fuji Network Television v. Espiritu,12
wenoted that Fuji's argument that Espiritu was an independent contractor under a
fixed-term contract is contradictory where employees under fixed-term contracts
cannot be independent contractors because in fixed-term contracts, an employer-
employee relationship exists. Significantly, we ruled therein that Espiritu's contract
indicating a fixed term did not automatically mean that she could never be a regular
employee which is precisely what Article 280 of the Labor Code sought to avoid.
The repeated renewal of Espiritu's contract coupled with the nature of work
performed pointed to the regular nature of her employment despite contrary claims
of Fuji and the nomenclature of the contract. Citing Dumpit-Murillo v. Court of
Appeals13 and Philips Semiconductors, Inc. v. Fadriquela, 14 we declared in Fuji that
the repeated engagement under contract of hire is indicative of the necessity and
desirability of the [employee's] work in respondent's business and where
employee's contract has been continuously extended or renewed to the same
position, with the same duties and remained in the employ without any
interruption, then such employee is a regular employee.
In the case at bar, the Court of Appeals disregarded the repeated renewals of the
Contracts of Retainer of petitioners spanning a decade and a half. The Court of
Appeals ruled that petitioners never became regular employees:

[T]his Court is not persuaded by petitioners' averments that they are regular
employees simply because they received benefits such as overtime pay, allowances,
Christmas bonuses and the like; or because they were subjected to administrative
rules such as those that regulate their time and hours of work, or subjected to
LSGl's disciplinary rules and regulations; or simply because they were treated as
part of LSGLs professional staff. It must be emphasised that LSG1, as the employer,
has the inherent right to regulate all aspects of employment of every employee
whether regular, probationary, contractual or fixed-term. Besides, petitioners were
hired for specific tasks and under fixed terms and conditions and it is LSGl's
prerogative to monitor their performance to see if they are doing their tasks
according to the terms and conditions of their contract and to give them incentives
for good performance.15 ChanRoblesVirtualawlibrary

We completely disagree with the Court of Appeals.

The uniform one-page Contracts of Retainer signed by petitioners were prepared by

LSGI alone. Petitioners, medical professionals as they were, were still not on equal
footing with LSGI as they obviously did not want to lose their jobs that they had
stayed in for fifteen (15) years. There is no specificity in the contracts regarding
terms and conditions of employment that would indicate that petitioners and LSGI
were on equal footing in negotiating it. Notably, without specifying what are the
tasks assigned to petitioners, LSGI "may upon prior written notice to the retainer,
terminate [the] contract should the retainer fail in any way to perform his assigned
job/task to the satisfaction of La Salle Greenhills, Inc. or for any other just cause." 16

While vague in its sparseness, the Contract of Retainer very clearly spelled out that
LSGI had the power of control over petitioners.

Time and again we have held that the power of control refers to the existence of
the power and not necessarily to the actual exercise thereof, nor is it essential for
the employer to actually supervise the performance of duties of the employee. 17 It is
enough that the employer has the right to wield that power.

In all, given the following: (1) repeated renewal of petitioners' contract for fifteen
years, interrupted only by the close of the school year; (2) the necessity of the
work performed by petitioners as school physicians and dentists; and (3) the
existence of LSGI's power of control over the means and method pursued by
petitioners in the performance of their job, we rule that petitioners attained regular
employment, entitled to security of tenure who could only be dismissed for just and
authorized causes. Consequently, petitioners were illegally dismissed and are
entitled to the twin remedies of payment of separation pay and full back wages. We
order separation pay in lieu of reinstatement given the time that has lapsed, twelve
years, in the litigation of this case.
We clarify, however, that our ruling herein is only confined to the three (3)
petitioners who had filed this appeal by certiorari under Rule 45 of theRules of
Court, and prior thereto, the petition for certiorari under Rule 65 thereof before the
Court of Appeals. The Decision of the NLRC covering other complainants in NLRC CA
No. 044835-05 has already become final and executory as to them.

Not being trier of facts, we remand this case to the NLRC for the determination of
separation pay and full back wages from the time petitioners were precluded from
returning to work the school year 2004 and compensation for work performed in
that period.
chanroble slaw

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in

CA G.R. SP No. 110391 is REVERSED AND SET ASIDE. The Decisions of the NLRC
in NLRC CA No. 044835-05 and NLRC CASE No. 00-0607081-04 are ANNULLED
AND SET ASIDE. The Complaint of petitioners Arlene T. Samonte, Vladimir P.
Samonte, Ma. Carmen Aurea S. Elepano against La Salle Greenhills, Inc. for illegal
dismissal is GRANTED. We REMAND this case to the NLRC for the computation of
the three (3) petitioners' separation pay and full back wages.

No pronouncement as to costs.

SO ORDERED. cralawlawlibrary

Velasco, (Chairperson), Peralta, Reyes and Jardeleza, JJ., concur.chanroblesvirtuallawlibrary