URSUMCO vs. Acibo, et. al.

G.R. No. 186439, 15 January 2014

Facts of the case:

URSUMCO is a domestic corporation engaged in the sugar cane milling business. The complainants were hired on various dates and on different capacities, i.e., drivers, crane operators, bucket hookers, welders, mechanics, laboratory attendants and aides, steel workers, laborers, carpenters and masons, among others. At the start of their respective engagements, the complainants signed contracts of employment for a period of 1 month or for a given season. URSUMCO repeatedly hired the complainants to perform the same duties and, for every engagement, required the latter to sign new employment contracts for the same duration of 1 month or a given season.

Complainants filed before the LA complaints for regularization, entitlement to the benefits under the existing CBA and attorney’s fees. The LA dismissed the complaint and held that the complainants were seasonal or project workers and not regular employees of URSUMCO.

The NLRC reversed the LA’s ruling and declared the complainants as regular URSUMCO employees and granted their monetary claims under the CBA. The NLRC pointed out that the complainants performed activities which were usually necessary and desirable in the usual trade or business of URSUMCO, and had been repeatedly hired for the same undertaking every season.

The CA granted in part the petition by affirming the NLRC’s ruling finding the complainants to be regular employees of URSUMCO but deleted the grant of monetary benefits under the CBA. On the claim for CBA benefits, the CA, ruled that the complainants were not entitled to receive them. The CA pointed out that while the complainants were considered regular, albeit seasonal, workers, the CBA-covered regular employees of URSUMCO were performing tasks needed by the latter for the entire year with no regard to the changing sugar milling season. Hence, the complainants did not belong to and could not be grouped together with the regular employees of URSUMCO, for collective bargaining purposes; they constitute a bargaining unit separate and distinct from the regular employees. Consequently, the CA declared that the complainants could not be covered by the CBA.

Issue:

Whether or not the respondents are regular employees of URSUMCO who can claim benefits under the CBA of regular employees.

Ruling of the Court:

The Court finds the respondents to be regular seasonal employees of URSUMCO but not as regular employees who can claim benefits under the CBA.

The respondents were tasked to perform duties regularly and habitually needed in URSUMCO’s operations during the milling season. As loader operators, hookers, crane operators and drivers were necessary to haul and transport the sugarcane from the plantation to the mill; laboratory attendants, workers and laborers to mill the sugar; and welders, carpenters and utility workers to ensure the smooth and continuous operation of the mill for the duration of the milling season, they perform the activities that are necessary and desirable in sugarcane production. For the production of sugarcane, on the other hand, a different set of workers are required who are experienced in farm or agricultural work. As in the milling of sugarcane, the plantation workers perform their duties only during the planting season.

Thus, the regular and repeated hiring of the same workers (milling season or planting season) to perform the same tasks for two separate seasons has put in place, principally through jurisprudence, the system of regular seasonal employment in the sugar industry and other industries with a similar nature of operations. Under the system, the plantation workers or the mill employees do not work continuously for one whole year but only for the duration of the growing of the sugarcane or the milling season. Their seasonal work, however, does not detract from considering them in regular employment since in a litany of cases, this Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid off during the off-season are not separated from the service in said period, but are merely considered on leave until re-employment.

Moreover, petitioners failed to prove that respondents were free to work elsewhere during the off-season.

Be this as it may, regular seasonal employees, like the respondents in this case, should not be confused with the regular employees of the sugar mill such as the administrative or office personnel who perform their tasks for the entire year regardless of the season. To reiterate, the respondents are regular seasonal employees, as the CA itself opined when it declared that "private respondents who are regular workers with respect to their seasonal tasks or activities and while such activities exist, cannot automatically be governed by the CBA between petitioner URSUMCO and the authorized bargaining representative of the regular and permanent employees." Citing jurisprudential standards, it then proceeded to explain that the respondents cannot be lumped with the regular employees due to the differences in the nature of their duties and the duration of their work vis-a-vis the operations of the company.

Good notes on this case:

Nature of employment

- The nature of the employment depends on the nature of the activities to be performed by the employee, considering the nature of the employer’s business, the duration and scope to be done, and, in some cases, even the length of time of the performance and its continued existence.

Regular employment

- An arrangement whereby the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.

- The primary standard that determines regular employment is the reasonable connection between the particular activity performed by the employee and the usual business or trade of the employer; the emphasis is on the necessity or desirability of the employee’s activity. Thus, when the employee performs activities considered necessary and desirable to the overall business scheme of the employer, the law regards the employee as regular.

- By way of an exception, paragraph 2, Article 280 of the Labor Code also considers regular a casual employment arrangement when the casual employee’s engagement has lasted for at least one year, regardless of the engagement’s continuity. The controlling test in this arrangement is the length of time during which the employee is engaged.

Project employment

- An arrangement whereby the employment has been fixed for a specific project or undertaking whose completion or termination has been determined at the time of the engagement of the employee. Two requirements, therefore, clearly need to be satisfied to remove the engagement from the presumption of regularity of employment, namely: (1) designation of a specific project or undertaking for which the employee is hired; and (2) clear determination of the completion or termination of the project at the time of the employee’s engagement.

- The services of the project employees are legally and automatically terminated upon the end or completion of the project as the employee’s services are coterminous with the project.

- Unlike in a regular employment under Article 280 of the Labor Code, however, the length of time of the asserted "project" employee’s engagement is not controlling as the employment may, in fact, last for more than a year, depending on the needs or circumstances of the project. Nevertheless, this length of time (or the continuous rehiring of the employee even after the cessation of the project) may serve as a badge of regular employment when the activities performed by the purported "project" employee are necessary and indispensable to the usual business or trade of the employer. In this latter case, the law will regard the arrangement as regular employment.

Seasonal employment

- It operates much in the same way as project employment, albeit it involves work or service that is seasonal in nature or lasting for the duration of the season. As with project employment, although the seasonal employment arrangement involves work that is seasonal or periodic in nature, the employment itself is not automatically considered seasonal so as to prevent the employee from attaining regular status. To exclude the asserted "seasonal" employee from those classified as regular employees, the employer must show that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he had been employed for the duration of the season. Hence, when the "seasonal" workers are continuously and repeatedly hired to perform the same tasks or activities for several seasons or even after the cessation of the season, this length of time may likewise serve as badge of regular employment. In fact, even though denominated as "seasonal workers," if these workers are called to work from time to time and are only temporarily laid off during the off-season, the law does not consider them separated from the service during the off-season period. The law simply considers these seasonal workers on leave until re-employed.

Casual employment

- Casual employment, the third kind of employment arrangement, refers to any other employment arrangement that does not fall under any of the first two categories, i.e., regular or project/seasonal.

Contractual or fixed term employment

- Interestingly, the Labor Code does not mention another employment arrangement – contractual or fixed term employment (or employment for a term) – which, if not for the fixed term, should fall under the category of regular employment in view of the nature of the employee’s engagement, which is to perform an activity usually necessary or desirable in the employer’s business.

- In Brent School, Inc. v. Zamora, the Court, for the first time, recognized and resolved the anomaly created by a narrow and literal interpretation of Article 280 of the Labor Code that appears to restrict the employee’s right to freely stipulate with his employer on the duration of his engagement. In this case, the Court upheld the validity of the fixed-term employment agreed upon by the employer, Brent School, Inc., and the employee, Dorotio Alegre, declaring that the restrictive clause in Article 280 "should be construed to refer to the substantive evil that the Code itself x x x singled out: agreements entered into precisely to circumvent security of tenure. It should have no application to instances where [the] fixed period of employment was agreed upon knowingly and voluntarily by the parties x x x absent any x x x circumstances vitiating [the employee’s] consent, or where [the facts satisfactorily show] that the employer and [the] employee dealt with each other on more or less equal terms[.]" The indispensability or desirability of the activity performed by the employee will not preclude the parties from entering into an otherwise valid fixed term employment agreement; a definite period of employment does not essentially contradict the nature of the employees duties as necessary and desirable to the usual business or trade of the employer.

- Nevertheless, "where the circumstances evidently show that the employer imposed the period precisely to preclude the employee from acquiring tenurial security, the law and this Court will not hesitate to strike down or disregard the period as contrary to public policy, morals, etc." In such a case, the general restrictive rule under Article 280 of the Labor Code will apply and the employee shall be deemed regular.