G.R. No. 106654 - Pantranco North Express, Inc. vs. National Labor Relations Commission

In 1971, private respondent Rodolfo Peronila was employed as a driver by Pantranco North Express, Inc., a domestic corporation engaged in public transportation as a common carrier.
Abelardo de Leon, one of the petitioners, was a manager of the corporation.

In 1973, Peronila was investigated for prolonged absence (over two and a half months or 107 calendar days, from November 1, 1972, to February 16, 1973) as he left work without approved leave to visit his deceased grandfather in Cotabato, Mindanao.
The investigation report, prepared by the petitioner’s area manager, deemed his belated explanation insufficient.
As a result, the petitioner declared that Peronila had grossly violated company policies (specifically CVT Policy No. 71-102) and dismissed him.
The dismissal was subsequently affirmed by the NLRC through an order by Mediator-Factfinder Loreto V. Poblete on March 20, 1973.

Fifteen years after his dismissal, in 1988, Peronila reappeared and requested the petitioner to reconsider his dismissal.
Although initially denied, persistent appeals eventually led the petitioner to re-hire him, but on a contractual basis limited to one month.
The terms of this re-employment were clearly set forth in a letter dated April 5, 1988, which stated:

The assignment as driver was effective April 5, 1988, lasting for one month.
Peronila was to be paid P64.00 a day.
He was required to work according to a schedule set by his immediate supervisor.
The contract automatically terminated on May 5, 1988, and explicitly declared that no employer-employee relationship existed, thereby excluding benefits such as sick leave, vacation leave, holiday pay, or overtime pay.

On April 20, 1988, barely fifteen days into his contractual employment, Peronila was involved in a vehicular mishap in Nueva Vizcaya when the bus he was driving collided with another vehicle.
An administrative investigation by the petitioner later found him guilty of involvement in the accident, resulting in the termination of his contractual service and non-renewal thereafter.

On January 18, 1989, Peronila filed a case for illegal dismissal before the Arbitration Branch of the NLRC-NCR, contending that his non-assignment after May 5, 1988, amounted to constructive dismissal.
He sought reinstatement along with one year’s backwages despite the clear contractual nature of his employment.

The Labor Arbiter dismissed Peronila’s case on February 12, 1991, upholding the contractual agreement and noting that his services were rendered under a fixed-term exception to regular employment.
On appeal, however, the NLRC reversed the labor arbiter’s finding, ruling that the dismissal was illegal and ordering his reinstatement with one year’s backwages.
The NLRC’s rulings were eventually challenged by petitioners Pantranco North Express, Inc. and/or Abelardo de Leon through a special civil action for certiorari.

The key point under dispute was whether the contractual clause stating that no employer-employee relationship exists between the parties was valid.
Questions arose over whether Peronila’s re-employment on a fixed-term basis could be deemed regular despite the explicit term, especially in relation to the protections under Article 280 of the Labor Code.

Whether the employment contract, which expressly stipulated that no employer-employee relationship existed, is valid and binding.
Whether the contractual nature of the re-employment precludes the application of the rights of a regular employee.

Whether Article 280, which presumes an employment to be regular when the employee renders services necessary or desirable to the business, applies even when there is an express agreement fixing the term of employment.
Whether the fixed-term contractual arrangement was intended to circumvent or undermine the statutory security of tenure afforded to regular employees.

Whether Peronila was deprived of his right to present evidence before the labor arbiter during the administrative proceedings.
Whether the NLRC, in reversing the labor arbiter’s decision, committed a grave abuse of discretion.