Hacienda Fatima vs. National Federation of Sugarcane Workers-Food and General Trade

Seasonal employees who perform work that is seasonal in nature but are repeatedly rehired for the same tasks over multiple seasons are regular employees with respect to that activity. The mere seasonal character of the work is insufficient to classify workers as seasonal employees; the employer must also prove that the employment was for the duration of one season only. Where workers have rendered service for several years — even if intermittent and broken — the repeated and continuing need for their performance is sufficient evidence of the necessity of that activity to the business, making the employment regular under Article 280 of the Labor Code.

Respondents were sugarcane workers at Hacienda Fatima who organized themselves into a union. After the union was certified as the collective bargaining representative, the employer refused to bargain collectively. Workers were not given work assignments for more than one month, prompting a strike that was settled through a Memorandum of Agreement. The employer subsequently reneged on commitments to bargain and employed armed guards to prevent union organizers from entering the premises. Starting September 1991, work assignments ceased entirely, forcing another strike in January 1992. A second conciliation agreement was signed but again breached by the employer, leading to the filing of the complaint for illegal dismissal and unfair labor practice.

• Nature of Employment: Respondents were sugarcane workers at Hacienda Fatima, performing tasks related to sugarcane farming. The work was seasonal in nature, tied to the agricultural cycle of sugarcane cultivation and harvesting. Respondents, with the exception of four individuals (Luisa Rombo, Ramona Rombo, Bobong Abriga, and Boboy Silva), had repeatedly worked as sugarcane workers for petitioners for several years.

• Union Organization and Certification: The workers organized themselves into a union — the National Federation of Sugarcane Workers-Food and General Trade. The union was subsequently certified as the collective bargaining representative following certification elections.

• Employer's Refusal to Bargain and Initial Strike: Despite certification, petitioners refused to sit down with the union for collective bargaining negotiations, using the pretext that the certification election results were under appeal. The workers, including respondents, were not given work for more than one month. In protest, respondents staged a strike.

• First Memorandum of Agreement (January 1991): The strike was settled upon the signing of a Memorandum of Agreement stipulating that: (a) parties would meet for CBA negotiations on January 11, 1991 and endeavor to conclude within thirty days; (b) management would give priority to women union members for gahit and dipol work; (c) Ariston Eruela Jr. would receive his normal six-day workload; (d) management would provide fifteen wagons for workers, with the existing workforce given priority; (e) management would no longer allow approximately eighteen scabs to work in the hacienda; and (f) the union would immediately lift the picket.

• Breach of First Agreement: Alleging that complainants failed to load the fifteen wagons, petitioners reneged on their commitment to bargain collectively. Instead, they employed all means, including the use of private armed guards, to prevent union organizers from entering the premises.

• Cessation of Work and Second Strike: Starting September 1991, petitioners ceased giving work assignments to complainants entirely. This forced the union to stage a second strike on January 2, 1992, grounded on the dismissal of union officials and members.

• Second Memorandum of Agreement (January 1992): Through conciliation efforts by the Department of Labor and Employment (DOLE), another Memorandum of Agreement was signed. It created a committee chaired by Rose Mengaling, composed of three representatives from each side, tasked with resolving the status of 36 affected union members within five working days using the 1990 Hacienda payroll and the prior January 4, 1990 Memorandum of Agreement as references. Disagreements were to be submitted to voluntary arbitration.

• Conciliation Meeting and Partial Agreement: At the conciliation meeting, the parties agreed that four individuals (Luisa Rombo, Ramona Rombo, Bobong Abrega, Boboy Silva) were deemed not employees. Twelve named employees were to be reinstated immediately upon availability of work. The status of Orencio Rombo was to be verified in the 1990 payroll.

• Second Breach and Filing of Complaint: Petitioners again reneged on their commitments under the second agreement, prompting respondents to file the complaint for illegal dismissal and unfair labor practice.

• NLRC Factual Findings: The NLRC found the record replete with evidence of complainants' persistence and determination in going back to work, contradicting the Labor Arbiter's finding that they refused work or were choosy. The NLRC found that petitioners did not want a union in their hacienda, demonstrated by their refusal to bargain, economic inducements promoting those who withdrew from the union, use of armed guards, and dismissal of union officials and members.

• Seasonal Employees Not Regular: Petitioners argued that respondents were admittedly seasonal workers and therefore not covered by the definition of regular employees under Article 280 of the Labor Code. They contended that paragraph 1 of Article 280 excludes seasonal employees from regular employment, and paragraph 2 refers exclusively to casual employees who have served for at least one year — not to seasonal workers.

• Applicability of Mercado v. NLRC: Petitioners maintained that the Court of Appeals erred in rejecting the ruling in Mercado v. NLRC (201 SCRA 332) and instead relying on Philippine Tobacco, Bacolod-Murcia, and Gaco, which petitioners argued were not directly applicable to the case at bench.

• No Illegal Dismissal or Unfair Labor Practice: Petitioners asserted that the Court of Appeals committed grave abuse of discretion in upholding the NLRC's conclusions that respondents were illegally dismissed, that petitioners were guilty of unfair labor practice, and that the union was entitled to moral and exemplary damages.

• N/A — The decision does not separately detail respondents' arguments, as the Petition was brought by the employer; the NLRC and CA had already ruled in respondents' favor, and the Supreme Court affirmed these rulings. The respondents' position was essentially the findings and conclusions of the NLRC and CA.

• Regular Employment Status: Whether the Court of Appeals erred in holding that respondents, admittedly seasonal workers, were regular employees, contrary to Article 280 of the Labor Code.

• Applicability of Precedent: Whether the Court of Appeals erred in rejecting Mercado v. NLRC and relying on other rulings not directly applicable.

• Illegal Dismissal, Unfair Labor Practice, and Damages: Whether the Court of Appeals committed grave abuse of discretion in upholding the NLRC's conclusions that respondents were illegally dismissed, that petitioners were guilty of unfair labor practice, and that the union was entitled to moral and exemplary damages.

• Regular Employment Status: The classification of respondents as regular employees was correct. Under Article 280 of the Labor Code, for workers to be excluded from regular employment on the ground of seasonal work, two conditions must concur: (1) the work or service performed is seasonal in nature, and (2) the employment is for the duration of the season. While the first condition was established — sugarcane work is seasonal — the second was not. Petitioners did not deny that respondents repeatedly worked for them for several years, meaning employment extended beyond one season. Applying Abasolo v. NLRC and De Leon v. NLRC, the primary standard for regular employment is the reasonable connection between the activity performed and the employer's usual business. Where an employee has performed the job for at least a year, even intermittently, the law deems the repeated and continuing need for performance as sufficient evidence of the necessity of that activity to the business. Seasonal workers called to work from time to time and temporarily laid off during the off-season are not separated from service but are merely considered on leave until re-employed.

• Applicability of Precedent: Mercado v. NLRC was correctly distinguished. In Mercado, workers performed phases of agricultural work for a definite period and their services were available to any farm owner thereafter; they were not hired regularly and repeatedly for the same phases. In contrast, herein respondents performed the same tasks for petitioners every season for several years, making them regular employees for their respective tasks, not merely project or seasonal workers available to any employer.

• Illegal Dismissal, Unfair Labor Practice, and Damages: The finding of illegal dismissal was proper. Petitioners' refusal to use respondents' services — despite their readiness, ability, and willingness to perform — and their hiring of other workers to perform the tasks originally assigned to respondents amounted to illegal dismissal. The sudden changes in work assignments, implemented immediately after respondents organized a union and demanded collective bargaining, reeked of bad faith and constituted an unjustified dismissal in violation of the Labor Code. The burden of proving a valid and authorized cause for termination rests on the employer, and petitioners failed to discharge this burden. As for unfair labor practice, the NLRC's factual findings — refusal to bargain, economic inducements for union withdrawal, use of armed guards, and dismissal of union officials and members — clearly demonstrated interference in the workers' right to self-organization. Factual findings of labor officials, who have acquired expertise in matters within their jurisdiction, are accorded not only respect but finality and are binding on the Supreme Court when supported by substantial evidence. The finding of unfair labor practice done in bad faith carried with it the sanction of moral and exemplary damages.

• Two-Condition Test for Seasonal Employment Exclusion — Under Article 280 of the Labor Code, to exclude workers from the category of regular employees on the ground of seasonal employment, two conditions must concur: (1) the work or service performed must be seasonal in nature, and (2) the employment must have been for the duration of one season. The existence of the first condition alone is insufficient; the employer must prove both. Where workers have been employed for more than one season, the exclusion does not apply and they are considered regular employees.

• Primary Standard of Regular Employment (De Leon v. NLRC Test) — The test for determining regular employment is the reasonable connection between the particular activity performed by the employee and the usual trade or business of the employer. The question is whether the activity is usually necessary or desirable in the employer's usual business. Additionally, if the employee has performed the job for at least one year — even if performance is not continuous and 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 employment is considered regular, but only with respect to such activity and while such activity exists.

• Seasonal Workers Considered On Leave During Off-Season — Seasonal workers who are called to work from time to time and are temporarily laid off during the off-season are not separated from service during that period. They are merely considered on leave until re-employed. Their employment relationship continues during the off-season, preserving their security of tenure.

• Factual Findings of Labor Officials — Factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality. These findings are binding on the Supreme Court when supported by substantial evidence, and the Court is not duty-bound to delve into their accuracy absent a clear showing that they were arbitrary and bereft of any rational basis.

• "For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have also been employed only for the duration of one season. The evidence proves the existence of the first, but not of the second, condition." — This passage encapsulates the ratio decidendi on the two-condition test for seasonal employment under Article 280.

• "[T]he fact that [respondents] do not work continuously for one whole year but only for the duration of the . . . season 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 off-season are not separated from service in said period, but merely considered on leave until re-employed." — Quoting Abasolo v. NLRC, this defines the doctrine that seasonal workers remain employees during the off-season.

• "Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid and authorized cause." — Citing Valiant Machinery and Metal Corp. v. NLRC, this reinforces the employer's burden of proof in dismissal cases.

• "Indeed, from respondents' refusal to bargain, to their acts of economic inducements resulting in the promotion of those who withdrew from the union, the use of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one cannot but conclude that respondents did not want a union in their hacienda—a clear interference in the right of the workers to self-organization." — The NLRC's finding, affirmed by the Supreme Court, articulating the evidentiary basis for unfair labor practice.

• Abasolo v. National Labor Relations Commission, 346 SCRA 293 (2000) — Followed. The Court relied on Abasolo for the doctrine that seasonal workers repeatedly hired over multiple seasons are regular employees and that the repeated and continuing need for their performance is evidence of the necessity of their activity to the employer's business.

• De Leon v. NLRC (cited within Abasolo) — Applied. Established the primary standard for determining regular employment: the reasonable connection between the activity performed and the employer's business, and the significance of one year's service even if intermittent.

• Mercado v. NLRC, 201 SCRA 332 (1991) — Distinguished. In Mercado, workers were not hired regularly and repeatedly for the same phases of agricultural work but on and off for any single phase, and their services were available to any farm owner. This factual difference distinguished it from the present case where respondents worked for the same employer on the same tasks for several seasons.

• Valiant Machinery and Metal Corp. v. National Labor Relations Commission, 252 SCRA 369 (1996) — Followed. Cited for the rule that the burden is on the employer to prove valid and authorized cause for termination.

• Nueva Ecija I Electric Cooperative, Inc. v. National Labor Relations Commission, 323 SCRA 86 (2000) — Followed. Cited for the rule that unfair labor practice done in bad faith carries moral and exemplary damages.

• Article 280, Labor Code of the Philippines (as amended) — The central provision interpreted. Article 280 classifies employment as regular where the employee engages in activities usually necessary or desirable in the employer's business, except where employment is for a specific project or undertaking, or where the work is seasonal and employment is for the duration of the season. Casual employment is defined residually, with the proviso that any employee rendering at least one year of service, continuous or broken, becomes a regular employee with respect to that activity. The Court applied this provision to hold that both conditions for the seasonal exclusion must be satisfied: the work must be seasonal and the employment must be for the duration of the season. The employers proved seasonality but failed to prove duration-limited employment.

Justices Puno, Sandoval-Gutierrez, and Corona concurred.

N/A — The decision was unanimous; no dissenting opinions were recorded.