Magsalin vs. N.O.W.M.

An employee engaged to perform activities necessary or desirable in the usual business of the employer is a regular employee, notwithstanding a fixed-term or day-to-day employment scheme designed to circumvent security of tenure.

Coca-Cola Bottlers Phils., Inc. hired respondent workers as "sales route helpers" for a fixed period of five months, after which they were employed on a day-to-day basis. The workers would wait outside the company gates each morning to be hired for the day, loading and unloading softdrink products on delivery trucks. When the company refused demands for regularization, the workers filed a complaint for regularization, illegal dismissal, and unfair labor practice.

• Employment Scheme: Petitioner Coca-Cola engaged respondents as "sales route helpers" for a fixed period of five months, subsequently hiring them on a day-to-day basis. Petitioner claimed they were hired to substitute for regular helpers who were unavailable or to address unexpected manpower shortages or unusually high volumes of work.
• Nature of Work: Respondents loaded and unloaded softdrink products on delivery trucks alongside route salesmen, distributing petitioner's products to various delivery points.
• Demand for Regularization: Respondents asked petitioner company for regular appointments, which the company refused.
• Quitclaims: During the pendency of the appeal before the Court of Appeals, 36 of the complainants individually executed a "Release, Waiver and Quitclaim" and received P15,000.00 each, an amount corresponding to the financial assistance awarded by the Voluntary Arbitrator.

• Nature of Work: Petitioner argued that its usual business is softdrink manufacturing, and the work of sales route helpers is merely a "post-production activity" not indispensable to the manufacture of its products.
• Voluntary Agreement: Petitioner maintained that respondents voluntarily and knowingly agreed to be employed on a day-to-day basis.

• Circumvention of Tenurial Security: Respondents contended that they did not voluntarily agree to the day-to-day employment arrangement and that the fixed-term scheme was designed to circumvent their right to security of tenure.
• Validity of Dismissal: Respondents argued that their dismissal was illegal.

• Regular Employment: Whether respondent workers are regular employees despite being hired for a fixed period of five months and subsequently on a day-to-day basis.
• Validity of Quitclaims: Whether the "Release, Waiver and Quitclaim" executed by 36 of the respondents is valid and binding.

• Regular Employment: Respondents are regular employees. The nature of the work—loading and unloading softdrinks—is necessary and desirable to Coca-Cola's business. The applicable test is the reasonable connection between the activity performed and the usual business of the employer. The business must be viewed in its entirety, not confined to mere manufacturing. The repeated rehiring and continuing need for their services attest to the necessity of their work. The scheme of hiring for five months and then day-to-day mocks the law and circumvents security of tenure; such arrangements are struck down as contrary to public policy. Parties cannot insulate themselves from labor laws by mere agreement, as employment contracts are impressed with public interest.
• Validity of Quitclaims: The quitclaims executed by 36 respondents are valid. While quitclaims are generally frowned upon, they are valid when executed voluntarily with full understanding and for credible and reasonable consideration. The P15,000.00 received corresponded to the Voluntary Arbitrator's award, and there was no evidence of fraud, deceit, or force. Dire necessity alone does not annul a release absent proof of coercion.

• Necessary or Desirable Work Test — An employment is deemed regular where the employee is engaged to perform activities usually necessary or desirable in the usual business or trade of the employer. The test is the reasonable connection between the particular activity performed and the usual business or trade. The nature of the work must be viewed from the perspective of the business in its entirety, not confined to a narrow scope (e.g., mere manufacturing). Furthermore, repeated and continuing need for an activity for at least one year indicates its necessity or desirability to the business.
• Validity of Quitclaims — While quitclaims executed by employees are commonly frowned upon as contrary to public policy, they are valid and binding when the person making the waiver does so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable. Dire necessity is not an acceptable ground for annulling a release absent proof that the employee was forced to execute it.
• Circumvention of Security of Tenure — Fixed-term employments imposed to preclude the acquisition of tenurial security by the employee are contrary to law, morals, good customs, public order, and public policy. The practice of hiring employees for a fixed period short of the six-month probationary period, and then hiring them on a day-to-day basis, mocks the law. Parties cannot insulate themselves from labor laws by simply contracting with each other, as employment contracts are impressed with public interest.

• "In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer."
• "The pernicious practice of having employees, workers and laborers, engaged for a fixed period of few months, short of the normal six-month probationary period of employment, and, thereafter, to be hired on a day-to-day basis, mocks the law."
• "A contract of employment is impressed with public interest. The provisions of applicable statutes are deemed written into the contract, and the parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other."

• De Leon vs. NLRC, 176 SCRA 615 — Followed. Cited for the proposition that repeated and continuing need for an activity for at least one year indicates its necessity or desirability to the employer's business, rendering the employment regular.
• Millanes vs. NLRC, 328 SCRA 79 — Followed. Cited for the principle that the nature of work must be viewed from the perspective of the business or trade in its entirety, not on a confined scope.
• Brent School, Inc. vs. Zamora, 181 SCRA 702 — Distinguished/Qualified. While the legality of fixed-term employment was upheld in that case, it was with the admonition that where the period is imposed to preclude tenurial security, it must be struck down as contrary to law and public policy.
• Bernardo vs. NLRC, 310 SCRA 186 — Followed. Cited for the rule that parties cannot insulate themselves from labor laws by simply contracting with each other, as employment contracts are impressed with public interest.
• Alcosero vs. NLRC, 288 SCRA 129 — Followed. Cited for the exception to the rule against quitclaims: legitimate waivers representing a voluntary and reasonable settlement of laborers' claims should be respected.
• Sicangco vs. NLRC, 235 SCRA 96 — Followed. Cited for the principle that dire necessity is not an acceptable ground for annulling a release when it is not shown that the employee has been forced to execute it.

• Article 280, Labor Code — Defines regular and casual employment. Applied to determine that respondents performing activities necessary or desirable to the employer's usual business are regular employees, regardless of any oral or written agreement to the contrary.

Davide, Jr., C.J. (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ.