Bustamante vs. NLRC

An employee who has rendered at least one year of service, whether such service is continuous or broken, is deemed a regular employee under Article 280 of the Labor Code and is entitled to full backwages from the time of illegal dismissal until actual reinstatement, where the employer's repeated hiring on probationary contracts is found to be a subterfuge to avoid regularization.

The petitioners were laborers, harvesters, and sprayers at Evergreen Farms, Inc., a company engaged in producing high-grade bananas. They had been hired and re-hired for the same type of work for periods lasting a month or more from 1985 to 1989. In September 1989, they were again hired and signed six-month probationary contracts from January to July 1990. On 25 June 1990, before the contracts expired, their employment was terminated on the ground of poor performance due to age, as none was allegedly below forty years old.

• Nature of Employment: Petitioners were hired as laborers, harvesters, and sprayers in respondent's banana plantation, performing tasks necessary and indispensable to its year-round operations.
• History of Hiring: Petitioners were hired and re-hired for periods of a month or more from 1985 to 1989 to perform the same work. In September 1989, they were again hired and signed six-month probationary contracts effective 2 January 1990 to 2 July 1990.
• Termination: On 25 June 1990, before the contracts expired, petitioners were terminated on the ground of poor performance due to age.
• Lower Court Findings: Both the Labor Arbiter and the NLRC agreed that petitioners were engaged to perform activities necessary to the employer's business. The NLRC further found that the repeated hiring on probationary status was a "convenient subterfuge" to prevent them from becoming regular employees.

• Illegal Dismissal and Regular Status: Petitioners argued that their dismissal was illegal because they had attained regular employee status under Article 280 of the Labor Code, having performed work necessary to the employer's business and having rendered more than one year of service.
• Entitlement to Backwages: Petitioners contended that as illegally dismissed regular employees, they were entitled to full backwages from the time of dismissal until actual reinstatement.

• Probationary Employment: Respondent Evergreen Farms, Inc. maintained that the petitioners were probationary employees whose contracts validly expired.
• Good Faith Termination: The respondent argued, and the NLRC initially agreed, that the termination was due to a mistaken interpretation of the law and was not attended by bad faith or arbitrariness, thus negating the claim for backwages.

• Regular Employee Status: Whether the petitioners had become regular employees of respondent Evergreen Farms, Inc. at the time of their termination.
• Entitlement to Backwages: Whether the petitioners are entitled to an award of full backwages following a finding of illegal dismissal.

• Regular Employee Status: The petitioners were regular employees. Their work as laborers, harvesters, and sprayers was necessary and desirable to the employer's banana production business. Furthermore, even assuming their activities were not necessary, they had rendered non-continuous or broken service for more than one year, thus satisfying the second criterion for regularity under Article 280 of the Labor Code.
• Entitlement to Backwages: The petitioners are entitled to full backwages. The employer's act of repeatedly hiring them on probationary contracts over several years evidenced bad faith and was a subterfuge to deny them regular status. The NLRC's reliance on Manila Electric Company vs. NLRC was misplaced because that case involved a valid cause for dismissal with a disproportionate penalty, whereas here there was no valid cause for dismissal.

• Regular and Casual Employment (Article 280, Labor Code) — An employment is regular if the employee performs activities necessary or desirable to the employer's usual business, or if the employee has rendered at least one year of service, whether continuous or broken. This provision is construed to protect laborers from being kept in a casual status indefinitely.
• Backwages for Illegal Dismissal — An employee who is illegally dismissed is entitled to full backwages from the time compensation is withheld until actual reinstatement. This right is not defeated by an employer's claim of good faith if the dismissal itself is without just or authorized cause.

• "The contract for probationary employment was utilized by respondent company as a chicanery to deny petitioners their status as regular employees and to evade paying them the benefits attached to such status."
• "The act of hiring and re-hiring the petitioners over a period of time without considering them as regular employees evidences bad faith on the part of private respondent."

• Baguio Country Club Corporation vs. NLRC, G.R. No. 71664, 28 February 1992, 206 SCRA 643 — Cited to support the interpretation of Article 280 as a safeguard against lopsided agreements that keep employees in a casual status.
• Manila Electric Company vs. NLRC, G.R. No. 78763, 12 July 1989, 175 SCRA 277 — Distinguished. In that case, reinstatement without backwages was ordered because there was a valid cause for dismissal (though the penalty was too severe). In the present case, there was no valid cause for dismissal, making the award of backwages proper.

• Article 280, Labor Code of the Philippines — Defines regular and casual employment. Applied to classify the petitioners as regular employees based on the nature of their work and their length of service.

• Justice Bellosillo
• Justice Vitug
• Justice Kapunan
• Justice Hermosisima, Jr.