G.R. No. 211947 - Cascayan vs. Spouses Gumallaoi

Case Summary (G.R. No. 211947)

Procedural Chronology

Labor Arbiter: After position papers were filed, the labor arbiter rendered a decision on September 20, 1988 finding petitioners’ dismissal illegal and ordering immediate reinstatement with full backwages and without loss of seniority.
NLRC: On appeal, the National Labor Relations Commission (Commissioner Conrado B. Maglaya) rendered a decision on September 18, 1989 setting aside the labor arbiter’s decision and ordering private respondent to pay petitioners one month’s pay each on humanitarian grounds.
Supreme Court Review: Petitioners filed a petition for certiorari alleging grave abuse of discretion by the NLRC. The Supreme Court dismissed the petition for lack of merit. (Applicable constitution for this decision: 1987 Philippine Constitution.)

Legal Issue Presented

Whether casual or temporary employees may lawfully be dismissed by the employer before the expiration of a one-year period of employment such that the dismissal could be deemed illegal, and whether petitioners, given the nature of their employment, were regular employees entitled to protection against illegal dismissal.

Applicable Law

1987 Philippine Constitution (applicable to decisions dated 1990 or later).
Article 280, Labor Code (quoted in full in the decision):
"Article 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 actually exists."
Petitioners invoked Article 4 of the Labor Code and Article 1702 of the Civil Code, urging that doubts be resolved in favor of labor.

Parties’ Contentions

Petitioners: Argued that their dismissal was illegal and invoked the principle of resolving doubts in favor of labor; sought reinstatement with backwages and preservation of seniority. They challenged the NLRC’s reduction of relief to one month’s pay and alleged grave abuse of discretion.
Private Respondent: Maintained that cutting cogon grass was not part of the usual business or trade of the employer (manufacture of cultured milk), characterized petitioners as casual employees, and asserted that petitioners were terminated for unsatisfactory performance. The company argued that because petitioners had not completed one year of service, they were not regular employees and could be dismissed.

Court Analysis

The Court analyzed Article 280 to determine whether the activities performed by petitioners—cutting cogon grass and weeds on factory premises—were “usually necessary or desirable in the usual business or trade of the employer.” The Court rejected the Solicitor General’s opposing view that grass-cutting might be considered usually necessary or desirable. The Court found that the usual business of the private respondent is the manufacture of cultured milk and that cutting cogon grass on the premises is ancillary at best and "alien thereto" of the usual business. Consequently, petitioners’ employment fell within the definition of casual employment under Article 280. The

Case Syllabus (G.R. No. 211947)

Citation and Procedural Posture

Reported in 269 Phil. 396, First Division, G.R. No. 90653, decided November 12, 1990.
Decision authored by Justice Gancayco; Justices Narvasa (Chairman), Cruz, Grino-Aquino, and Medialdea concurred.
Petition for certiorari filed by petitioners Policarpio Capule and Luis Madoro challenging the decision of the National Labor Relations Commission (NLRC).
The petition alleged that the NLRC committed grave abuse of discretion in setting aside a labor arbiter’s decision that had found petitioners’ dismissal illegal.

Factual Background

Private respondent Yakult Philippines, Inc. is engaged in the manufacture of cultured milk sold under the brand name “Yakult.”
Petitioners (Capule and Madoro) were hired to cut cogon grass and weeds at the back of the factory building used by the private respondent.
Petitioners were not required to work on a fixed schedule; they worked on any day of the week at their own discretion and convenience.
The services of petitioners were terminated by the private respondent on July 13, 1987.
Petitioners filed a complaint for illegal dismissal with the National Labor Relations Commission following their termination.

Proceedings Below

After submission of position papers by the parties, the labor arbiter rendered a decision on September 20, 1988:
- The labor arbiter found the dismissal of the petitioners illegal.
- The labor arbiter ordered immediate reinstatement to their former positions with full backwages and without loss of seniority rights.
Private respondent appealed the labor arbiter’s decision to the NLRC.
On September 18, 1989, Commissioner Conrado B. Maglaya of the NLRC rendered a decision:
- The NLRC set aside the labor arbiter’s decision.
- The NLRC issued a new judgment ordering private respondent to pay petitioners one (1) month’s pay each based on humanitarian considerations.
Petitioners then filed the present petition for certiorari alleging grave abuse of discretion by the NLRC in rendering that decision.

Legal Issues Presented

Whether casual or temporary employees may be dismissed by the employer before the expiration of the one-year period of employment without being entitled to remedies for illegal dismissal.
Whether petitioners were regular employees under Article 280 of the Labor Code because the tasks they performed were usually necessary or desirable to the usual business or trade of the employer.
Whether petitioners became regular employees by virtue of having rendered at least one year of service.
Whether doubts should be resolved in favor of labor under Article 4 of the Labor Code and Article 1702 of the Civil Code as invoked by petitioners.

Statutory Provision Applied (Article 280, Labor Code)

The Court reproduced and applied Article 280 of the Labor Code, which provides:
- An employment shall be deemed 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 engagement or where the work is seasonal and employment is for the duration of the season.
- An employment shall be deemed casual if it is not covered by the preceding paragraph.
- Provided, That any employee who has rendered at least one year of service, w