Espina vs. Highlands Camp/Rawlings Foundation, Inc.

Employees repeatedly hired for the same tasks over ten years by a business that operates continuously throughout the year are regular employees, not seasonal workers, regardless of the employer's practice of requiring annual reapplications or the intermittent nature of the work within each year.

Highlands Camp/Rawlings Foundation, Inc. is a non-profit religious organization operating a camping site in Iba, Zambales, providing a venue for religious training, spiritual growth, and evangelization. Respondent Jayvelyn Pascal served as Highlands' Administrator. Two groups of employees—headed by Randy Dolojan and Edwin Adona—were engaged as cooks, cook helpers, utility workers, and service crew at the camping site, performing services integral to maintaining the camp's facilities and catering to campers' needs. The dispute arose when Highlands ceased rehiring these workers in 2011 despite their submission of reapplication requirements, replacing them with new hires.

Highlands Camp/Rawlings Foundation, Inc. operates a camping site in Iba, Zambales, dedicated to providing a venue for religious training, spiritual growth, and evangelization. Respondent Jayvelyn Pascal served as its Administrator. Beginning in 2000, Highlands hired two groups of employees as cooks, cook helpers, utility workers, and service crew at the camping site. From 2000 to 2010, these workers regularly reported for work from January to June, were on call from July to September, reported daily during the peak month of October, and were again on call in November or December depending on the number of campers. Highlands' camping site remained open to the public throughout the year, even during lean months.

At the start of each year, Highlands required the workers to submit their biodata, medical clearances, medical health card, and Social Security number for rehiring. In 2011, after submitting these requirements, the workers were told they would be called once campers arrived. Highlands never called them. The workers later discovered that new employees had been hired in their place. Two groups of employees—headed by Randy Dolojan in NLRC LAC No. 03-001071-13 and Edwin Adona in NLRC NCR Case No. RAB-III-03-17502-11—filed separate complaints for illegal dismissal, non-payment of overtime pay, holiday pay, and 13th month pay, with claims for moral and exemplary damages. The complaints were consolidated and raffled to the NLRC Branch III in San Fernando City, Pampanga.

Highlands countered that its camp operations were not a year-round business but had peak seasons only, and that the workers were seasonal employees whose work was limited to a specific season. It presented a summary table for years 2000–2010 showing that the workers averaged less than three months of service per year. Highlands argued that none of the workers had rendered at least six months of service in any given year, that their employment was terminated after every seasonal year, and that reemployment required a new application. It further contended that the workers' services as cooks, cook helpers, utility workers, and service crew were not necessary or desirable to its main purpose of evangelization, and that the camp could continue to operate even without such personnel.

The Labor Arbiter found the workers to be regular employees, noting that Highlands' business did not totally stop operations even during off-season and that the workers remained on call. The NLRC affirmed with modification, adding holiday pay. The Court of Appeals reversed, ruling that the workers were seasonal employees based on Highlands' summary table showing they worked an average of less than three months per year and that their positions varied from year to year. The Supreme Court took up the case on certiorari.

• Regular Employment Status: Petitioners maintained that their annual rehiring since 2001 and the services they rendered, which were necessary and desirable to Highlands' business, conferred upon them the status of regular employees.
• Illegal Dismissal: Petitioners argued that Highlands' failure to rehire them in 2011 without valid cause constituted illegal dismissal.
• Unpaid Benefits: Petitioners asserted entitlement to holiday pay, overtime pay, and other benefits due to regular employees, and prayed for separation pay in lieu of reinstatement.

• Seasonal Employment: Respondents argued that Highlands' business was seasonal in nature with peak seasons only, and that petitioners were seasonal employees whose work was limited to a specific season.
• Insufficient Service Duration: Respondents contended that none of the petitioners had rendered at least six months of service in a year, presenting a summary table showing an average of less than three months per year.
• Reapplication Requirement: Respondents maintained that petitioners' employment was terminated at the end of each year and that reemployment required a new application based on qualification for the position sought.
• Services Not Necessary or Desirable: Respondents argued that petitioners' services as cooks, cook helpers, utility workers, and service crew were not necessary or desirable in Highlands' business and were not directly related to its main purpose of evangelization, asserting that the camp could continue to operate even without such personnel.

• Employment Status: Whether petitioners were seasonal or regular employees.
• Validity of Dismissal: Whether petitioners' dismissal was valid.

• Employment Status: Yes, petitioners were regular employees. The two elements of seasonal employment—work seasonal in nature and employment for the duration of the season—were absent, as Highlands operated continuously throughout the year and petitioners rendered services regardless of peak or lean season.
• Validity of Dismissal: No, the dismissal was invalid. As regular employees, petitioners could not be terminated without just or authorized cause, and Highlands' unilateral refusal to rehire them without valid reason amounted to illegal dismissal.

• Employment Status: Article 295 of the Labor Code provides that employment is deemed regular where the employee performs activities usually necessary or desirable in the usual business or trade of the employer, except where the work is seasonal in nature and the employment is for the duration of the season. Two elements must concur for seasonal employment: (1) the work or services must be seasonal in nature, and (2) the employee must have been employed for the duration of the season. Neither element was present. First, Highlands' camping site operated continuously throughout the year; it did not suspend or cease operations at any time. Its own summary of bookings from 2001–2011 showed year-round operations, negating any claim of seasonality. Second, petitioners performed services as cooks, cook helpers, utility workers, and service crew regardless of whether it was peak or lean season. Third, Highlands failed to present any employment contracts, employee files, payrolls, or similar documents proving that petitioners were hired as seasonal employees for a specific season. This failure gave rise to the presumption that the presentation of such documents would be prejudicial to Highlands' cause. The fact that Highlands required annual reapplications did not bar regularization, because employment status is determined by the nature of the employer's business and the duration of the tasks performed, not by the parties' intent or the hiring procedure. Even if petitioners worked only three months per year, their repeated hiring for the same services over ten years conferred regular employment status under the principle that repeated and continuing need for the same activity is sufficient evidence of its necessity, if not indispensability, to the business. Highlands' cyclical scheme of hiring and rehiring year after year manifested its intent to prevent petitioners from attaining regular employment. Moreover, petitioners' services were necessary and desirable to Highlands' business: without cooks, cook helpers, utility workers, and service crew, it would be difficult or impossible for Highlands to maintain its camping facilities and cater to campers' needs. Highlands' continued engagement of other workers to perform the same tasks after 2011 further proved the continuing need for the services originally rendered by petitioners.

• Validity of Dismissal: As regular employees, petitioners enjoyed security of tenure under Article 294 of the Labor Code and could not be terminated except for just or authorized cause. Highlands' unilateral refusal to rehire them in 2011, without any valid reason, constituted illegal dismissal. Petitioners were therefore entitled to full backwages computed from the time of illegal dismissal up to the finality of the Decision, and separation pay in lieu of reinstatement, given the strained relations between the parties and the lapse of nine years rendering reinstatement impracticable. The award of 13th month pay was affirmed for respondents' failure to show it had been paid. However, overtime pay and holiday pay were denied because petitioners failed to prove they rendered service in excess of eight working hours per day or worked on holidays. The claim for moral and exemplary damages was likewise denied for failure to prove that respondents acted in bad faith. Attorney's fees of 10% of the total monetary award were proper because petitioners were compelled to litigate to protect their interests. Respondent Jayvelyn Pascal was not held personally liable, there being no showing that she acted with malice, ill will, or bad faith as Highlands' Administrator; under the doctrine of corporate separate personality, only the employer-corporation may be held liable for illegal dismissal absent bad faith on the part of corporate officers.

• Regular Employment Test — The primary standard for determining regular employment is the reasonable connection between the particular activity performed by the employee and the usual business or trade of the employer. The test is whether the work is usually necessary or desirable in the employer's business. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business. The Court applied this test by finding that petitioners' repeated hiring for ten years to perform the same tasks proved the necessity and desirability of their services to Highlands' camping site business.

• Elements of Seasonal Employment — To be classified as seasonal employees, two elements must concur: (1) the employee must be performing work or services that are seasonal in nature, and (2) the employee must have been employed for the duration of the season. When seasonal workers are continuously and repeatedly hired to perform the same tasks for several seasons or even after the cessation of the season, this length of time may serve as a badge of regular employment. The Court found neither element present because Highlands operated year-round and petitioners worked regardless of season.

• Determination of Employment Status by Nature of Work, Not Parties' Intent — Employment status is determined not by the intent or motivations of the parties but by the nature of the employer's business and the duration of the tasks performed by the employees. It does not depend on the will of the employer or the procedure for hiring and the manner of designating the employee. The Court applied this doctrine by holding that Highlands' requirement of annual reapplications did not bar petitioners from attaining regular employment status.

• Repeated Rehiring as Badge of Regular Employment — The repeated renewal of employment contracts over many years, despite interruptions, does not bar an employee from attaining regular employment. An employer's act of hiring and rehiring an employee in various capacities without an exact period of employment is a mere gambit to thwart the employee's tenurial protection. The Court found that Highlands' cyclical scheme of hiring and rehiring petitioners year after year manifested its intent to prevent them from attaining regular employment.

• Absence of Employment Contracts as Red Flag — While the absence of a written contract does not automatically confer regular status, it has been construed as a red flag in cases involving the question of whether workers are regular or project/seasonal employees. The employer's failure to produce employment contracts stipulating the seasonal nature and duration of employment raises a serious question whether the employees were properly informed of their employment status. The Court applied this principle by holding that Highlands' failure to present petitioners' employment contracts was prejudicial to its cause.

• Separation Pay in Lieu of Reinstatement — Separation pay is granted when: (a) the relationship between the employer and the illegally dismissed employee is already strained; and (b) a considerable length of time has already passed rendering it impossible for the employee to return to work. A prayer for separation pay is an indication of strained relations. The Court awarded separation pay because petitioners prayed for it in their complaint and nine years had elapsed rendering reinstatement impracticable.

• "The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer." — This passage, quoting Abasolo vs. NLRC, articulates the canonical test for regular employment status, frequently cited in labor jurisprudence to distinguish regular from project or seasonal employment.

• "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." — This passage, quoting Universal Robina Sugar Milling Corp. vs. Acibo, defines the principle that repeated rehiring of seasonal workers converts their status to regular employment, and was central to the Court's ruling.

• "xxx where from the circumstances it is apparent that the period has been imposed to preclude the acquisition of tenurial security by the employee, then it should be struck down as being contrary to law, morals, good customs, public order and public policy. The pernicious practice of having employees, workers and laborers, engaged xxx short of the normal six-month probationary period of employment, and, thereafter, to be hired on a day-to-day basis, mocks the law." — This passage, quoting Claret School of Quezon City vs. Sinday, condemns employer schemes designed to circumvent regularization and was applied to invalidate Highlands' cyclical rehiring practice.

• "The contract of labor is imbued with public interest. This interest remains protected." — This closing statement underscores the Court's policy orientation toward protecting labor security and signals the broader social dimension of the ruling beyond the individual parties.

• Abasolo vs. National Labor Relations Commission, 400 Phil. 86 (2000) — Cited as the controlling authority for the primary standard of determining regular employment: the reasonable connection between the employee's activity and the employer's usual business or trade. Followed and applied directly to the facts.

• Universal Robina Sugar Milling Corporation vs. Acibo, 724 Phil. 489 (2014) — Cited for the explication of seasonal employment and the principle that repeated rehiring of seasonal workers for the same tasks over several seasons serves as a badge of regular employment. Followed.

• Philippine Fruit & Vegetable Industries, Inc. vs. National Labor Relations Commission, 369 Phil. 929 (1999) — Cited for the principle that an employer's continuous operation throughout the year negates the claim that its business is seasonal in nature. Applied to Highlands' year-round camping operations.

• Omni Hauling Services, Inc. et al. vs. Bon, et al., 742 Phil. 335 (2014) — Cited for the doctrine that the absence of employment contracts raises a serious question whether employees were properly informed of their employment status. Applied to Highlands' failure to present employment contracts.

• Claret School of Quezon City vs. Sinday, G.R. No. 226358, October 9, 2019 — Cited for the principle that yearly application and reemployment do not negate regular employment status, and that imposing periods to preclude tenurial security is contrary to law. Followed.

• Samonte vs. La Salle Greenhills, Inc., 780 Phil. 778 (2016) — Cited for the principle that repeated renewal of employment contracts over fifteen years despite interruptions did not bar attainment of regular employment. Followed by analogy.

• Poseidon Fishing vs. National Labor Relations Commission, 518 Phil. 146 (2006) — Cited for the principle that an employer's act of hiring and rehiring an employee in various capacities without an exact period of employment is a gambit to thwart tenurial protection. Followed.

• Millenium Erectors Corporation vs. Magallanes, 649 Phil. 199 (2010) — Cited for the principle that repeated and continuing need for an employee's services proves the necessity, if not indispensability, of those services to the employer's business, thereby conferring regular status. Applied to petitioners' services at Highlands.

• Vicmar Development Corp. vs. Elarcosa, 775 Phil. 218 (2015) — Cited for the principle that continuous re-engagement of employees to perform the same kind of tasks proves the necessity and desirability of their services. Applied to Highlands' continued hiring of replacement workers for the same tasks.

• Article 295, Labor Code (Regular and Casual Employment) — Provides that employment shall be deemed regular where the employee has been engaged to perform activities 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, or where the work or service is seasonal in nature and the employment is for the duration of the season. The Court applied this provision to hold that petitioners' activities were necessary and desirable to Highlands' year-round camping business, and that the seasonal employment exception did not apply.

• Article 294, Labor Code (Security of Tenure) — Provides that in cases of regular employment, the employer shall not terminate the services of an employee except for just cause or when authorized by law, and that an employee unjustly dismissed shall be entitled to reinstatement without loss of seniority rights and other privileges, full backwages inclusive of allowances, and other benefits or their monetary equivalent. The Court applied this provision to hold that petitioners' dismissal without just or authorized cause was illegal and to award backwages and separation pay in lieu of reinstatement.

Caguioa, J. (Working Chairperson), J. Reyes, Jr., J., Lopez, J., and Gaerlan, J., concurred. No separate concurring opinions were written.