61. Herma Shipyard, Inc. vs.

Esguerra, April 17, 2017

Facts: Herma Shipyard, Inc. is a domestic corporation engaged in the business of shipbuilding and repair.
The respondents were its employees occupying various positions such as welder, leadman, pipe fitter,
laborer, helper, etc. On June 17, 2009, the respondents filed before the Regional Arbitration Branch III, San
Fernando City, Pampanga a complaint for illegal dismissal, regularization with prayer for the payment of
full back wages against petitioners. Respondents alleged that they are regular employees who have been
continuously performing tasks usually necessary and desirable in its business.
Respondents further alleged that as a condition to their continuous and uninterrupted employment,
petitioners made them sign employment contracts for a fixed period ranging from one to four months to
make it appear that they were project-based employees. Per respondents, petitioners resorted to this scheme
to defeat their right to security of tenure, but in truth there was never a time when they ceased working for
Henna Shipyard due to expiration of project-based employment contracts.
For their defense, petitioners argued that respondents were its project-based employees in its shipbuilding
projects and that the specific project for which they were hired had already been completed. In support,
thereof, Herma Shipyard presented contracts of employment, some of which are written in the vernacular
and denominated as Kasuduang Paglilingkod (Pang-Proyektong Kawani).
Issue: Whether or not the respondents were project-based employees and not regular employees
Ruling: Yes. The services of project-based employees are co-terminous with the project and may be
terminated upon the end or completion of the project or a phase thereof for which they were hired. The
principal test in determining whether particular employees were engaged as project-based employees, as
distinguished from regular employees, is whether they were assigned to carry out a specific project or
undertaking, the duration and scope of which was specified at, and made known to them, at the time of their
engagement. It is crucial that the employees were informed of their status as project employees at the time
of hiring and that the period of their employment must be knowingly and voluntarily agreed upon by the
parties, without any force, duress, or improper pressure being brought to bear upon the employees or any
other circumstances vitiating their consent.
It is settled, however, that project-based employees may or may not be performing tasks usually necessary
or desirable in the usual business or trade of the employer. The fact that the job is usually necessary or
desirable in the business operation of the employer does not automatically imply regular employment;
neither does it impair the validity of the project employment contract stipulating ~ fixed duration of
employment.
In sum, the CA erred in disregarding the project employment contracts and in concluding that respondents
have become regular employees because they were performing tasks necessary and desirable to the business
of Henna Shipyard and were repeatedly rehired. The Labor Arbiter and the NLRC, which have expertise in
their specific and specialized jurisdiction, did not err, much less commit grave abuse of discretion in holding
that respondents were project-based employees. Their uniform conclusion is supported by substantial
evidence and should, therefore, be accorded not only respect, but even finality.
Seasonal Employees
62. Benares vs. Pancho, April 29, 2005
Facts: Respondent Hda. Maasin II is a sugar cane plantation located in Murcia, Negros Occidental with
an area of 12-24 has. planted, owned and managed by Josefina Benares, individual co-respondent.
Complainants alleged to have been terminated without being paid termination benefits by Benares in
retaliation to what they have done in reporting to the DOLE their working conditions vis-à-vis wages and
other mandatory benefits. A formal complaint for illegal dismissal with money claims was filed before the
NLRC. After submission of their position papers, the Labor Arbiter issued an order to the effect that the
case is submitted for resolution.
The LA a quo issued the assailed decision dismissing the complaint for lack of merit. Upon appeal to the
NLRC, the decision was reversed. The NLRC held that respondents attained the status of regular seasonal
workers of Had. Maasin II having worked therein from 1964-1985. It found that petitioner failed to
discharge the burden of proving that the termination of respondents was for a just or authorized cause.
Motion for reconsideration was denied. CA affirmed the NLRC’s decision with the modification that the
backwages and other monetary benefits shall be computed from the time the compensation was withheld in
accordance with Article 279 of the labor Code, as amended by R.A. No. 6715. Motion for reconsideration
denied.
Issue: Whether or not respondents are regular employees of Hacienda Maasin II and thus entitled to
monetary claims
Ruling: The law provides for three kinds of employees: (1) regular employees or those who have been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer; (2) project employees or those whose 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; and (3) casual employees or those who are neither regular nor project employees.
Citing jurisprudence, the Court, in Hacienda Fatima, condensed the rule that the primary standard for
determining regular employment is the reasonable connection between the particular activity performed by
the employee vis-a-vis the usual trade or business of the employer. This connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular business or
trade in its entirety. If the employee has been performing the job for at least a year, even if the performance
is not continuous and merely intermittent, the law deems repeated and continuing need for its performance
as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while such activity exists.
The issue, therefore, of whether respondents were regular employees of petitioner has been adequately dealt
with. The labor arbiter, the NLRC and the CA have similarly held that respondents were regular employees
of petitioner. Since it is a settled rule that the factual findings of quasi-judicial agencies which have acquired
expertise in the matters entrusted to their jurisdiction are accorded by this Court not only respect but even
finality, we shall no longer disturb this finding.
We also find no reason to disturb the finding that respondents were illegally terminated. When there is no
showing of clear, valid and legal cause for the termination of employment, the law considers the matter a
case of illegal dismissal and the burden is on the employer to prove that the termination was for a just or
authorized cause. In this case, as found both by the NLRC and the Court of Appeals, petitioner failed to
prove any such cause for the dismissal of respondents.
Doctrine: A seasonal employee is considered a regular employee when the employee has been performing
the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered regular, but only with
respect to such activity and while such activity exists.
Test for determining regular employment: The reasonable connection between the particular activities
performed by the employee vis-à-vis the usual trade or business of the employer. This connection can be
determined by the nature of the work performed in relation to the scheme of the particular business.
63. Hacienda Bino/Hortencia Starke vs. Cuenca, April 15, 2005
Facts: Hacienda Bino is a 236-hectare sugar plantation located at Negros Occidental, and represented in
this case by Hortencia L. Starke, owner and operator of the said hacienda. The 76 individual respondents
were part of the workforce of Hacienda Bino consisting of 220 workers, performing various works, such as
cultivation, planting of cane points, fertilization, watering, weeding, harvesting, and loading of harvested
sugarcanes to cargo trucks. During the off-milling season, petitioner Starke issued an Order or Notice which
stated, that all Hacienda employees who signed in favor of CARP are expressing their desire to get out of
employment on their own volition. The respondents regarded such notice as a termination of their
employment. As a consequence, they filed a complaint for illegal dismissal. The respondents as
complainants alleged that they are regular and permanent workers of the hacienda and that they were
dismissed without just and lawful cause.
Issue: Whether the respondents are regular or seasonal employees
Ruling: The primary standard for determining regular employment is the reasonable connection between
the particular activity performed by the employee in relation to the usual trade or business of the employer.
There is no doubt that the respondents were performing work necessary and desirable in the usual trade or
business of an employer. Hence, they can properly be classified as regular employees. For respondents to
be excluded from those classified as regular employees, it is not enough that they perform work or services
that are seasonal in nature. They must have been employed only for the duration of one season. While the
records sufficiently show that the respondents’ work in the hacienda was seasonal in nature, there was,
however, no proof that they were hired for the duration of one season only.