Case Summary (G.R. No. 184262)
Applicable Law and Procedural History
The case was decided on April 24, 2017, under the 1987 Philippine Constitution. It concerns the Labor Code of the Philippines, specifically Article 295 (formerly Article 280), which distinguishes regular, casual, and project employment. The procedural history shows that the Labor Arbiter (LA) initially ruled in favor of the respondents, declaring them regular employees illegally dismissed. The National Labor Relations Commission (NLRC) reversed this decision, dismissing the complaint, but the Court of Appeals (CA) reinstated the LA ruling, prompting UST to elevate the case to the Supreme Court.
Facts of the Case
Pontesor, et al. were repeatedly hired by UST from 1990 to 1999 for various maintenance tasks including laborer, mason, tinsmith, painter, electrician, welder, and carpenter roles. They claimed these tasks were necessary and desirable for UST’s ongoing operations and thus contended they should be considered regular employees with security of tenure. UST acknowledged their repeated hiring but argued they were engaged solely on a per-project basis, substantiated by multiple Contractual Employee Appointments (CEAs) specifying the term and scope of each project. UST posited that termination of employment was valid upon project completion or contract expiration.
Labor Arbiter's Findings
The Labor Arbiter ruled that Pontesor, et al. were regular employees entitled to security of tenure due to:
- Their service exceeding one year
- Their work being vital and inherently indispensable to UST’s maintenance of facilities
- Manipulative use of CEAs to prevent acquisition of regular status
Consequently, the LA held that their dismissal was illegal and ordered reinstatement with full backwages and without loss of seniority.
NLRC's Decision
The NLRC vacated the LA ruling, finding that Pontesor, et al. were fixed-term employees under valid contracts that expired upon project completion. The NLRC rejected the claim of project employment but characterized the respondents as casual employees, emphasizing that their work was not necessary or desirable to UST’s primary educational business.
Court of Appeals Ruling
The CA reversed the NLRC, reinstating the LA's declaration of regular employment. The CA reasoned that:
- Pontesor, et al. performed services necessary and desirable to UST’s business as shown by repeated rehiring and continuous need
- The CEAs’ descriptions of projects were vague and broad, failing to delineate specific projects
Thus, the CA classified the respondents as regular employees entitled to security of tenure and protection against dismissal without just cause.
Issue Before the Supreme Court
Whether the Court of Appeals correctly ruled that Pontesor, et al. are regular employees rather than project or fixed-term employees, and consequently whether their dismissal by UST was illegal.
Supreme Court's Analysis and Holding
The petition lacked merit. The Supreme Court emphasized the limited scope of Rule 45 review, focusing on legal correctness and the absence of grave abuse of discretion by the CA in reversing the NLRC. The Court defined grave abuse of discretion as capricious, whimsical, or arbitrary judgment lacking substantial evidence.
Under Article 295 of the Labor Code, regular employment arises either when:
- An employee performs activities that are usually necessary or desirable to the employer’s usual business or trade; or
- An employee has rendered at least one year of service, continuous or broken, for a specific activity
Applying this, the Court held:
- Pontesor, et al.’s maintenance work—though not directly related to the educational services offered by UST—falls under the second category of regular employment because their aggregate service exceeded one year.
- They cannot be considered project employees because the CEAs failed to specify definite projects with clear scope and duration; rather, the CEAs described their duties vaguely as assisting with maintenance ta
Case Syllabus (G.R. No. 184262)
Background and Procedural History
- The case involves a petition for review on certiorari challenging the Court of Appeals’ (CA) June 12, 2008 Decision and August 22, 2008 Resolution.
- CA reversed and set aside the National Labor Relations Commission (NLRC) Resolutions dated March 26 and May 25, 2004, which had vacated the Labor Arbiter’s (LA) October 23, 2002 Decision.
- LA declared respondents—Fernando Pontesor, Rodrigo Clacer, Santiago Buisa, Jr., and Jimmy Nazareth—as regular employees of the University of Santo Tomas (UST) who were illegally dismissed.
- Respondents initially filed a complaint for regularization and illegal dismissal before the NLRC.
Factual Synopsis
- Respondents were repeatedly hired by UST between 1990 and 1999 to perform various maintenance and repair tasks, including jobs as laborer, mason, tinsmith, painter, electrician, welder, and carpenter.
- Respondents claimed that due to their continuous performance of these necessary maintenance functions, they should be considered regular employees.
- UST admitted to hiring them repeatedly but contended that they were hired on a per-project basis under Contractual Employee Appointments (CEAs).
- CEAs specified the project’s nature and term, with employment ending upon project completion or expiration of the contract.
- UST asserted that the respondents’ termination was valid as their projects were finished.
Labor Arbiter’s Decision
- The Labor Arbiter ruled in favor of respondents, ordering their reinstatement with full backwages and without loss of seniority.
- The LA found:
- Respondents rendered at least one year of service.
- Their tasks were vital and inherently indispensable to maintaining UST’s buildings and classrooms.
- CEAs were contrived to deny them security of tenure and thus the termination was invalid and illegal.
National Labor Relations Commission Resolution
- NLRC vacated the LA ruling and dismissed respondents’ complaint.
- It held that respondents were not regular employees but hired under fixed-term contracts which they knowingly and voluntarily accepted.
- Found respondents were casual employees, rejecting UST’s claim that they were project employees because their work was not part of UST’s main business (education).
- Reconsideration motions of respondents were denied.
Court of Appeals Decision
- The CA reversed the NLRC, reinstating the Labor Arbiter’s ruling.
- The CA held that:
- Respondents performed work necessary and desirable to UST’s business, evidenced by repeated rehiring and continuous need.
- Description of projects in CEAs were vague and general, not specific an