Title
Hacienda San Isidro/Silos Farms and Rey Silos Llamado vs. Lucito Villaruel and Helen Villaruel
Case
G.R. No. 220087
Decision Date
Nov 13, 2023
Spouses filed labor complaints against hacienda owners for illegal dismissal and underpayment. Courts ruled Helen, a seasonal sugarcane worker, as a regular employee, affirming backwages and separation pay despite pakyaw payment scheme.
seasonal employee
regular employee
labor law
A

Case Summary (G.R. No. 220087)

Factual Background

Spouses Lucito and Helen Villaruel worked at Hacienda San Isidro. Helen performed seasonal tasks including sugarcane cultivation and counting patdan over a number of years; payrolls, worksheets, and an affidavit by a former hacienda secretary were submitted. Petitioners contend Helen worked intermittently, was paid on a pakyaw basis, ran a sari‑sari store, and was free to contract elsewhere. Respondents assert continuous rehiring for the same seasonal tasks and reliance on petitioner’s hacienda as evidence of regular employment.

Procedural History — Labor Arbiter and NLRC

The Labor Arbiter (LA) found Lucito’s dismissal lacked due process and awarded nominal damages; found Helen to be a regular employee illegally dismissed and awarded backwages and separation pay. The NLRC initially modified and reversed parts of the LA decision (finding Helen not an employee), then upon reconsideration reinstated the LA’s decision with modifications and awarded monetary relief to both spouses. Petitioners sought further remedies up the appellate ladder.

Procedural History — Court of Appeals

The CA initially granted the petition for certiorari, declaring Helen not an employee due to insufficient proof of the employer-employee relationship, particularly power of control. On motion for reconsideration, the CA issued an Amended Decision reversing itself as to Helen, declaring her a regular employee under Article 280 (now 295) on the basis that her tasks were necessary or desirable in the employer’s usual business and that she had rendered service for more than one season; the CA also held that being paid on a pakyaw basis does not per se negate regular employment if the employer has the right of control.

Supreme Court Procedural Posture

A Petition for Review on Certiorari under Rule 45 was filed contesting the CA’s Amended Decision. Initial resolution denied the petition, but after petitioners’ motions and interlocutory steps, the petition was reinstated. The sole legal issue presented to the Supreme Court was whether Helen, a seasonal worker in a sugar plantation, is a regular employee.

Governing Statute — Article 295 (formerly Article 280)

Article 295 provides two relevant paragraphs: (1) an employment is regular when the employee is engaged to perform activities usually necessary or desirable in the employer’s usual business, except where employment is for a specific project or seasonal in nature for the duration of the season; and (2) employment not covered by the first paragraph is deemed casual, but the proviso provides that any employee who rendered at least one year of service, whether continuous or broken, shall be considered regular with respect to the activity in which employed.

Legal Standards and Key Precedents Applied

  • Seasonal employees ordinarily fall under the exception in Article 295’s first paragraph if employed only for the duration of a season; but seasonal workers engaged for more than one season for the same activities become regular employees under the general rule.
  • Gapayao v. Fulo and Mercado v. NLRC are cited on the point that seasonal employees who are free to contract services to others may not be regular seasonal employees; however, Mercado involved workers hired on and off for a single phase of agricultural work, distinguishable from repeated rehiring for the same tasks.
  • Pakyaw (task-basis) compensation pertains to method of payment, not determinative of employment status; regularity may still be found if the employer has the right to control performance of duties (control test concerns the right to control, not actual exercise).

Court’s Factual Finding and Deference to Quasi-Judicial Agencies

The Supreme Court emphasized that LA, NLRC, and CA uniformly found Helen to be a regular employee and that factual findings of quasi-judicial labor agencies, when affirmed by the appellate court, command deference and finality absent grave abuse of discretion. The Court declined to disturb those factual determinations.

Court’s Legal Analysis — Why Helen Is Regular

The Court corrected the CA’s inconsistent reasoning (the CA labeled Helen casual under the second paragraph and then applied the proviso) and clarified the proper legal basis:

  • Helen’s work was seasonal in nature, and she was employed repeatedly for the same tasks over more than one season — satisfying the two requisites for regular seasonal employment: (1) seasonal nature of work; (2) employment for more than one season.
  • The proviso in the second paragraph is applicable only to those who are casual under the first paragraph’s exclusion; it does not apply where the employee falls under the first paragraph’s general rule or its exception structure. Thus Helen’s regularity derives from the first paragraph (exception to exception), not from treating her as casual and then invoking the proviso.
  • Mercado is distinguishable: Mercado covered workers hired intermittently for a single phase whose services became immediately available to others; by contrast, Helen was repeatedly hired for the same activities across seasons, so the Mercado exception does not apply.
  • That Helen maintained a sari‑sari store or was "free" to offer services elsewhere does not negate regularity when she was continuously rehired for the same seasonal tasks for several seasons.
  • Pakyaw compensation does not automatically eliminate employer-employee status; the relevant inquiry is whether the employer had the right to control the performance of duties. The existence of the right suffices; actual exercise of supervision is not necessary. Because Helen performed tasks on petitioners’ hacienda, petitioners had both the opportunity and right to exercise control.

Application of Law to Facts

Applying these principles, the Court found that Helen met the criteria for regular seasonal employment: her duties were necessary or desirable to petitioners’ usual business (sugar farming), and she was employed in those tasks across multiple seasons. The CA’s ultimate conclusion that she was a regular employee was correct, despite the CA’s erroneous intermediate characterization as casual. Petitioners’ arguments regarding freedom to work elsewhere and pakyaw compensation were found unpersuasive in light of repeated rehiring and the right-to-control test.

Holding and Relief

The Supreme Court denied the Petition for Review on Certiorari and affirmed the CA’s Amended Decision and related

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