Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 155505

February 15, 2007

EMILIO M. CAPAROSO and JOEVE P. QUINDIPAN, Petitioners,

vs.
COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, COMPOSITE
ENTERPRISES INCORPORATED, and EDITH TAN, Respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review assailing the 27 June 2002 Decision 1 and 30 September
2002 Resolution2of 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 Composites 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.
1awwphi1.net

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 Arbiters 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 NLRCs 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 employees 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."11In 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
Associate Justice

DANTE O. TINGA
Asscociate 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 Courts Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
C E R TI F I C ATI O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons 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 Courts Division.
REYNATO S. PUNO
Chief Justice

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

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

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

Id. at 120.

Id. at 150-157. Penned by Presiding Commissioner Raul T. Aquino with Commissioners

Victoriano R. Calaycay and Angelita A. Gacutan, concurring.
5

CA rollo, p. 134.

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

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

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.