Servidad v. NLRC1998 March 18, GR No 128682

Facts: Servidad was employed on 9 May 1994 by respondent INNODATA as Data Control Clerk, under a contract of employment. Section 2 of such contract states: This Contract shall be effective for a period of one (1) year commencing on 10 May1994 until 10 May 1995 unless sooner terminated pursuant to the provisions hereof.

Petitioner was a contractual employee for six months or from the period of May 10, 1994 to November 10, 1994 during which, the employer can terminate with due notice. The contract also states that should the employee continue his employment beyond the 6-month period, he shall become a regular employee upon demonstration of sufficient skill. On November 9, 1995 or one day before his contractual terms ends, he was made to sign a three-month probationary employment and later, an extended three-month employment good until 9 May 1995.Petitioner was terminated on May 9, 1995 and filed an illegal dismissal complaint before the Labor Arbiter.

The Labor Arbiter found the respondent INNODATA guilty of the charge and was ordered to pay backwages and reinstatement of petitioner. On appeal thereto by INNODATA, the NLRC reversed the decision declaring that the contract between petitioner and private complainant was for a fixed term and the dismissal, at the end of one year, was valid.

Issue: WON the contract entered into by the petitioner and respondent is valid and enforceable.

Held: NO.

The NLRC found that the contract in question is for a fixed term. The said contract provides for two periods. The first period was for six months terminable at the option of private respondent, while the second period was also for six months but probationary in character. In both cases, the private respondent did not specify the criteria for the termination or retention of the services of petitioner. It is violative of the right of the employee against unwarranted dismissal. By the provisions of the very contract itself, petitioner has become a regular employee of private respondent.

As to the private respondent statement that the one-year period stipulated in subject contract was to enable petitioner to acquire the skill necessary for the job. In effect, what respondent employer theorized upon is that the one-year term of employment is probationary. If the nature of the job did actually necessitate at least one year for the employee to acquire the requisite training and experience, the same could not be a valid probationary employment as it falls short of the requirement of Article 281[10] of the Labor Code. It was not brought to light that the petitioner was duly informed at the start of his employment, of the reasonable standards under which he could qualify as a regular employee.

WHEREFORE, the petition is GRANTED, the questioned decision of NLRC is SET ASIDE, and the decision of the Labor Arbiter, dated August 20, 1996, in NLRC-NCR-00-055-03471-95 REINSTATED, with the modification that the award of backwages be computed from the time of the dismissal of petitioner to his actual or payroll reinstatement. Costs against the private respondent.

Caparoso vs CA

Facts: Composite is a supplier of confectioneries Caparoso and Quindipan were Composites deliverymen. Petitioners were dismissed from the service and subsequently filed illegal dismissal complaint. Respondents alleged that petitioners were both hired as deliverymen, initially for three months and then on a month-to-month basis and the termination from employment resulted from the expiration of their contracts of employment on 8 October 1999. Labor Arbiter - petitioners are regular employees of respondents NLRC- Reversed LA decision CA- affirmed the NLRCs decision. 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.

Issues :1. Whether petitioners are regular employees of respondents2. Whether respondents are guilty of illegal dismissal.

Held:Petitioners are Not Regular Employees 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. 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.

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. . 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.