Facts:

This case revolves around the Agusan del Norte Electric Cooperative, Inc. (Petitioners) and two individuals, Joel Cagampang and Glenn Garzon (Respondents). The debt of the respondents began on October 1, 1990, when they commenced employment as linemen under agreed employment contracts that lasted for a maximum of three months. They received a daily wage of P122.00 while working eight hours a day, sometimes even on Sundays. Upon expiration of their contracts, they were laid off for a period ranging from one to five days before being recalled to work based on job orders. This pattern continued with multiple contract renewals for similar short-term employments until their last contracts expired on April 30, 1998, and July 30, 1999, respectively, after which they were not rehired, leading to their subsequent loss of employment.

On January 11, 2001, Cagampang and Garzon filed an illegal dismissal case against the cooperative before Labor Arbiter Alim D. Pangandaman of the Regional A

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Facts:

Employment Background

• Respondents Joel Cagampang and Glenn Garzon commenced work as linemen for petitioner Agusan del Norte Electric Cooperative, Inc. (ANECO) on October 1, 1990.
• They were employed under a contract for a period not exceeding three months, required to work eight hours a day and sometimes on Sundays, receiving a daily salary of P122.00.

Nature of Employment Contracts

• Initially hired on a short-term basis, respondents’ contracts were set as job orders.
• These contracts were renewed repeatedly for similar short periods until the final contracts expired on April 31, 1998, and July 30, 1999.

Termination and Filing of Dismissal Case

• Upon the non-renewal of their contracts, the respondents lost their employment.
• On January 11, 2001, respondents filed an illegal dismissal case before Labor Arbiter Alim D. Pangandaman, praying for backwages, salary differential, allowances, premium for work during holidays and rest days, service incentive leave, and separation pay.

Labor Arbiter Decision

• On June 22, 2001, the Labor Arbiter declared the dismissal illegal.
• The ruling directed ANECO to pay the respondents a total monetary award of P371,596.84 and granted specific claims while dismissing others for lack of merit.

NLRC Proceedings

• Petitioners appealed the Labor Arbiter’s decision to the NLRC Fifth Division.
• On October 14, 2002, the NLRC set aside the Labor Arbiter’s decision except for portions granting service incentive leave pay, attorney’s fees (fixed at 10% of the total award), and salary differential for respondent Garzon, rendering a new judgment dismissing the case for lack of merit, subject to these exceptions.

Court of Appeals Intervention

• After the NLRC resolution and the denial of a motion for reconsideration by the petitioners, respondents filed a petition for certiorari with the Court of Appeals.
• On January 25, 2005, the Court of Appeals granted the petition, reinstating the Labor Arbiter’s decision and setting aside the NLRC resolutions.

Issues Raised by the Parties

• Petitioners contended that the respondents were merely emergency workers on a fixed-term, contractual basis and should not be considered regular employees, arguing that their dismissal was not illegal.
• Respondents maintained that the termination was not a mere expiry of a contract but an illegal dismissal, entitling them to the full benefits declared by the Labor Arbiter.

Allegations of Abuse of Discretion

• Petitioners further argued that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction.
• They contended that the evidentiary basis for classifying the respondents as regular employees was flawed, misinterpreting the nature of their employment relationship.

Issue:

Qualification of Employment Status

• Whether the respondents, though originally hired on a short-term contractual basis, should be considered regular employees given the repeated renewals and the nature of their duties within ANECO’s business.
• Whether the continuation of employment beyond the fixed-term contracts strips the respondents of the status of merely “project employees.”

Legality of the Dismissal

• Whether the dismissal of the respondents, arising from the non-renewal of their job orders, amounts to an illegal dismissal.
• Whether the employer failed to observe due process in effecting the termination.

Abuse of Discretion by the NLRC

• Whether the NLRC’s actions in setting aside certain portions of the Labor Arbiter’s ruling constitute a grave abuse of discretion warranting reversal.
• Whether the burden of proof imposed on the employer regarding the just cause for termination was sufficiently discharged.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)