SECOND DIVISION

 

EMILIO M. CAPAROSO and                                   G.R. No. 155505

JOEVE P. QUINDIPAN,

                                Petitioners,                                     Present:

 

                                                                                       QUISUMBING, J.,

                                                                                           Chairperson,

                                                                                       CARPIO,

                 - versus -                                                  CARPIO MORALES,

                                                                                       TINGA, and

                                                                                       VELASCO, JR., JJ.    

 

COURT OF APPEALS,

NATIONAL LABOR RELATIONS

COMMISSION, COMPOSITE                       

ENTERPRISES INCORPORATED,                    Promulgated:

and EDITH TAN,

Respondents.                               February 15, 2007                                                                                         

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

 

D E C I S I O N

 

CARPIO, J.:

 

The Case

 

         Before the Court is a petition for review assailing the 27 June 2002 Decision[1] and 30 September 2002 Resolution[2] of the Court of Appeals in CA-G.R. SP No. 67156.

 

 

The Antecedent Facts

 

         Composite Enterprises Incorporated (Composite) is engaged in the distribution and supply of confectioneries to various retail establishments within the Philippines.  Emilio M. Caparoso (Caparoso) and Joeve P. Quindipan (Quindipan) were Composite’s deliverymen.  Caparoso alleged that he was hired on 8 November 1998 while Quindipan alleged that he was hired on intermittent basis since 1997.  Quindipan further alleged that he had been working continuously with Composite since August 1998.

 

         On 8 October 1999, Caparoso and Quindipan (petitioners) were dismissed from the service.  They filed a consolidated position paper before the Labor Arbiter charging Composite and its Personnel Manager Edith Tan (Tan) with illegal dismissal.

 

         Composite and Tan (respondents) alleged that petitioners were both hired on 11 May 1999 as deliverymen, initially for three months and then on a month-to-month basis.  Respondents alleged that petitioners’ termination from employment resulted from the expiration of their contracts of employment on 8 October 1999.

 

         The Labor Arbiter ruled that petitioners are regular employees of respondents.  In his Decision[3] dated 15 June 2000, the Labor Arbiter held:

 

         WHEREFORE, premises considered, judgment is hereby rendered declaring complainants to have been illegally dismissed from employment and consequently, respondent COMPOSITE ENTERPRISES CORPORATION is hereby ordered to immediately reinstate complainants to their respective former position[s] without loss of seniority rights and other privileges, with full backwages from the date of dismissal up to the actual date of reinstatement which, as of this date, amounts to P93,155.36, as above computed.

 

            SO ORDERED.[4]

 

 

 

         The Labor Arbiter ruled that by the very nature of respondents’ business and the nature of petitioners’ services, there is no doubt as to the employment status of petitioners.

 

         Respondents appealed to the National Labor Relations Commission (NLRC).  In its 9 May 2001 Decision,[5] the NLRC set aside the Labor Arbiter’s Decision and dismissed petitioners’ complaint for illegal dismissal.    The NLRC ruled that the mere fact that the employees’ duties are necessary or desirable in the business or trade of the employer does not mean that they are forbidden from stipulating the period of employment.  The NLRC held that petitioners’ contracts of employment are valid and binding between the contracting parties and shall be considered as the law between them.  The NLRC ruled that petitioners are bound by their employment contracts.

 

         Petitioners filed a motion for reconsideration.  The NLRC denied the motion in its 9 August 2001 Resolution.[6]

 

         Petitioners filed a petition for certiorari before the Court of Appeals.

 

 

 The Ruling of the Court of Appeals

 

         In   its   27 June 2002  Decision,  the  Court of Appeals  dismissed  the

 

petition and affirmed the NLRC’s 9 May 2001 Decision and 9 August 2001 Resolution.

 

         The Court of Appeals held that respondents’ manpower requirement varies from month to month depending on the demand from their clients for their products.  Respondents’ manpower requirement determines the period of their employees’ services.  Respondents employed petitioners for the purpose of addressing a temporary manpower shortage.

 

         Petitioners filed a motion for reconsideration.  In its 30 September 2002 Resolution, the Court of Appeals denied the motion for reconsideration.

 

         Hence, the petition before this Court.

 

 

The Issues

 

         The petition raises these issues:

 

         1.   Whether petitioners are regular employees of respondents; and

 

         2.   Whether respondents are guilty of illegal dismissal.

 

 

The Ruling of this Court

 

         The petition has no merit.

 

 

 

Petitioners are Not Regular Employees

        

         Article 280 of the Labor Code 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 activity exists.

 

 

         Under Article 280 of the Labor Code, a regular employee is (1) one who is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, or (2) a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed.[7]

 

         However, 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.  

 

         In Brent School, Inc. v. Zamora,[8] this Court ruled that the contract, which was entered into before the effectivity of the Labor Code on 1 November 1974, was valid under Republic Act No. 1052 or the Termination Pay Law, as amended.  Although the contract was entered into before the effectivity of the Labor Code, the Court traced how the present Article 280 of the Labor Code, which deleted employment with fixed or definite period, evolved.  In sustaining the validity of fixed-term employment, the Court explained in Brent:

 

            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 become pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences.[9] 

 

 

         The Court thus laid down the criteria under which fixed-term  employment could not be said to be in circumvention of the law on security of tenure, thus:

 

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.[10]

        

 

         We agree with the Court of Appeals that in this case, the fixed period of employment was knowingly and voluntarily agreed upon by the parties.  The Court of Appeals noted that there was no indication of force, duress, or improper pressure exerted on petitioners when they signed the contracts.  Further, there was no proof that respondents were regularly engaged in hiring workers for work for a minimum period of five months to prevent the regularization of their employees.  

 

                     

Petitioners’ Employment is akin to Probationary Employment

 

         At most, petitioners’ employment for less than six months can be considered probationary.  Article 281 of the Labor Code provides:

 

         Art. 281. Probationary Employment. - Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period.  The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement.  An employee who is allowed to work after a probationary period shall be considered a regular employee.

 

 

         Petitioners were hired on 11 May 1999, initially for three months.  After the expiration of their contracts, petitioners were hired on a month-to-month basis.  Their contracts of employment ended on 8 October 1999.  Hence, they were employed for a total of five months.  Their employment did not even exceed six months to entitle them to become regular employees.

 

         We cannot accept petitioners’ bare allegations that Caparoso was hired on 8 November 1998 while Quindipan was hired on intermittent basis since 1997.  Petitioners failed to substantiate their allegations.  The payslips submitted by petitioners to prove their prior employment with respondents are handwritten and indicate only the date and amount of pay.  They do not even indicate the name of the employer.  The printed payslips during the period of the contracts indicate not only the name of the employer but also the breakdown of petitioners’ net pay.

 

 

Petitioners were not Illegally Dismissed from Employment

 

         Petitioners’ terms of employment are governed by their fixed-term contracts.  Petitioners’ fixed-term employment contracts had expired.  They were not illegally dismissed from employment.

 

         This Court has ruled that “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.”[11]  In this case, it was not established that respondents intended to deny petitioners their right to security of tenure.  Besides, petitioners’ employment did not exceed six months.   Thus, the Court of Appeals did not err in sustaining petitioners’ dismissal from employment. 

 

         WHEREFORE, we DENY the petition.  We AFFIRM the 27 June 2002 Decision and 30 September 2002 Resolution in CA-G.R. SP No. 67156. 

 

         SO ORDERED.

 

                                     ANTONIO T. CARPIO

                                            Associate Justice

WE CONCUR:

 

LEONARDO A. QUISUMBING

Associate Justice

Chairperson

 

 

 

     CONCHITA CARPIO MORALES               DANTE O. TINGA

                   Associate Justice                                 Associate Justice

 

 

 

PRESBITERO J. VELASCO, JR.

Associate Justice

 

 

ATTESTATION

         I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

 

                                            LEONARDO A. QUISUMBING

                                                                   Associate Justice

               Chairperson

 

CERTIFICATION

         Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

 

 

                                                             REYNATO S. PUNO

                                                                      Chief Justice


[1]                      Rollo, pp. 38-45. Penned by Associate Justice Juan Q. Enriquez, Jr. with Associate Justices Eugenio                         S. Labitoria and                     Mariano C. Del Castillo, concurring. 

[2]                      Id. at 47-48. Penned by Associate Justice Juan Q. Enriquez, Jr. with Associate Justices Remedios      Salazar-Fernando and Mariano C. Del Castillo, concurring. 

[3]                      Id. at 114-120. Penned by Labor Arbiter Napoleon M. Menese. 

[4]                      Id. at 120.

[5]                      Id. at 150-157. Penned by Presiding Commissioner Raul T. Aquino with Commissioners Victoriano                         R. Calaycay and                   Angelita A. Gacutan, concurring. 

[6]                      CA rollo, p. 134.

[7]                      Philippine Long Distance Telephone Company, Inc. v. Arceo, G.R. No. 149985, 5 May 2006, 489      SCRA 617.

[8]                      G.R. No. 48494, 5 February 1990, 181 SCRA 702.

[9]                      Id. at 716.

[10]                    Pure Foods Corp. v. NLRC, 347 Phil 434, 443 (1997).

[11]                    Poseidon Fishing v. NLRC, G.R. No. 168052, 20 February 2006, 482 SCRA 717.