A.M. No. MTJ-24-024 [Formerly OCA IPI No. 20-3132-MTJ - Atty. Joselito M. Baetiong vs. Presiding Judge Jo Anne N. Dela Cruz-Malaton, Municipal Circuit Trial Court, Casiguran-Dilasag-Dinalungan, Aurora

Philippine Village Hotel, the petitioner, was forced to permanently cease operations on May 19, 1986 due to serious financial and business reverses, which resulted in the termination of the services of its employees.
Prior to this closure, the hotel employed private respondents, who later became involved in labor complaints against the petitioner.

Following the closure, the Philippine Village Hotel Employees and Workers Union filed a complaint against the petitioner alleging issues related to separation pay, unfair labor practices, and illegal lock-out.
On May 27, 1987, the Labor Arbiter issued an Order acknowledging the financial losses suffered by the petitioner, confirming that the losses were genuine and valid grounds for terminating the services of the employees; however, the Arbiter directed that the petitioner should give hiring priority to these employees if business operations were resumed.

On February 1, 1989, in order to determine the feasibility of resuming operations, the petitioner conducted a one-month dry-run operation, during which it hired casual workers, including some of the private respondents.
The hiring was executed through contracts of employment explicitly stating that the engagement was for a fixed period – from February 1, 1989 to March 1, 1989.
After evaluating performance over the one-month period, the petitioner terminated the private respondents’ services on March 2, 1989, consistent with the contractual term.

On April 6, 1989, private respondents, together with Tupas Local Chapter No. 1362, filed a complaint against the petitioner for illegal dismissal and unfair labor practice before the NLRC-NCR Arbitration Branch (NLRC Case No. 00-04-01665-89).
The Labor Arbiter rendered a decision on December 19, 1989 dismissing the complaint on the ground that it was without sufficient factual or legal basis.
On November 7, 1991, the NLRC reversed the Labor Arbiter’s dismissal by ordering the petitioner to reinstate the complainants to their former or substantially equivalent positions without loss of seniority rights and to pay them full backwages for a period not exceeding three years.
The petitioner subsequently filed a petition for certiorari under Rule 65, alleging grave abuse of discretion by the NLRC in characterizing the private respondents as regular employees despite evidence that their employment was fixed for one month as stipulated by their contracts.
A motion for reconsideration filed by the petitioner on March 5, 1992, was denied for lack of merit, leading to the present petition that challenges the NLRC’s decision.

Whether the NLRC committed grave abuse of discretion by classifying the private respondents as regular employees despite their employment contracts explicitly stating a fixed one-month term.
Whether the reemployment of the private respondents during the one-month dry-run operation should be deemed a continuation of their previous regular employment or as entirely new, fixed-period contractual engagements.
Whether the contractual nature of fixed employment periods, as agreed upon by both parties, can be overridden by the employer’s subsequent decision to rehire former employees merely for feasibility testing.
Whether the legal principle that the essential determinant of term employment is the agreed-upon period (day certain) outweighs the practical necessities of the operations performed during that period.