Tuppil, Jr. vs. LBP Service Corporation

A fixed-term employment contract is valid and does not violate security of tenure where the fixed period was knowingly and voluntarily agreed upon by the parties without force, duress, or improper pressure, and where the employer and employee dealt with each other on more or less equal terms with no moral dominance exercised by either; the fact that the employee performs activities necessary and desirable in the employer's usual business does not prohibit the fixing of a definite period, and such a contract terminates on its own at the end of the stipulated period.

LBP Service Corporation, a manpower services corporation, entered into a manpower services agreement with Land Bank of the Philippines and deployed janitors, messengers, and utility persons to Land Bank's different branches in Metro Manila. The deployed workers included two groups of complainants: Tuppil, et al. (Julian Tuppil, Jr., Diosdado Baterna, Nicanor Mapa, Demetrio Bautista, Jr., Norberto Navarro, Roldan Ramacula, Raymund Alentajan, Roel Solis, Ricardo Flores, Rizaldy De Leon, Zaldy Pedro, Joseph Reyes, and Ariel Ramos) and Borja, et al. (Larry Borja, Marlo Merced, Ferdinand Hosana, Rico Espeña, and Marcos Vasquez). The dispute implicated the Labor Code's guarantees of security of tenure and the recognized validity of fixed-term employment, which the Court assessed against the terms of the individual employment contracts governing the parties' relationship.

LBP Service Corporation, a manpower services corporation, entered into a manpower services agreement with Land Bank of the Philippines and, pursuant thereto, deployed janitors, messengers, and utility persons to Land Bank's different branches in Metro Manila. The workers deployed under this arrangement fell into two groups: Tuppil, et al., composed of Julian Tuppil, Jr., Diosdado Baterna, Nicanor Mapa, Demetrio Bautista, Jr., Norberto Navarro, Roldan Ramacula, Raymund Alentajan, Roel Solis, Ricardo Flores, Rizaldy De Leon, Zaldy Pedro, Joseph Reyes, and Ariel Ramos; and Borja, et al., composed of Larry Borja, Marlo Merced, Ferdinand Hosana, Rico Espeña, and Marcos Vasquez. At the time of their hiring, the workers were informed that their engagement was for a specific period, and their employment contracts expressly stipulated the duration of their services and the causes for recall or end of employment, among them the worker's voluntary resignation, the non-renewal or termination of LBP Service's contract with the client company to which the worker was assigned, and the client's cessation of need for the worker's services, with a commitment to keep the worker's name in a roster of reserves for future referral and employment with other client companies.

In 2014, the contract between LBP Service and Land Bank expired, resulting in the recall of affected employees, including Tuppil, et al. and Borja, et al. Upon receipt of the notices of recall, Tuppil, et al. resigned. Thereafter, both Tuppil, et al. and Borja, et al. filed a complaint for illegal dismissal against LBP Service before the Labor Arbiter, alleging that they were regular employees performing services necessary and desirable to LBP Service's business. LBP Service countered that the recalled workers were supposed to be reassigned but that Tuppil, et al. opted to resign.

The Labor Arbiter found that the complainants were fixed-term contractual employees and that no evidence showed LBP Service had terminated their contracts, the notice of recall not amounting to termination of services. Borja, et al. were ordered to report for work because their engagement merely lapsed when the contract between LBP Service and Land Bank expired, they remaining in LBP Service's workforce and subject to deployment to other clients, while Tuppil, et al. were declared to have voluntarily resigned. On the voluntariness of the resignation, the Labor Arbiter found that the complainants failed to substantiate their bare allegations of involuntariness; that they admitted during the mandatory conference on September 16, 2014 that they were already working for another manpower agency which in turn deployed them to Land Bank; that their resignation letters showed they were moved by personal and professional reasons, expressed gratitude to LBPSC, and in the case of Ramacula specifically stated that he was transferring to LBPRDC, presumably Land Bank's new manpower agency; and that these statements could not be construed as indications of forced resignation. The Labor Arbiter further noted that Tuppil, et al.'s intention to leave their posts became more evident when they refused LBP Service's offer to report back for work so they could be deployed to other clients, and that the filing of the complaint for illegal dismissal did not suggest involuntariness since it included no prayer for reinstatement.

• Serious Error in Appreciation of Evidence: Tuppil, et al. and Borja, et al. alleged that the Court of Appeals committed serious error in the appreciation of evidence and that its decision had no factual and legal bases.
• Regular Employment: Petitioners maintained that they are regular employees, having performed services necessary and desirable to LBP Service's business.
• Illegal Dismissal: Petitioners maintained that they were illegally dismissed.

• Reassignment and Voluntary Resignation: LBP Service countered that the recalled workers were supposed to be reassigned but that Tuppil, et al. opted to resign.

• Scope of Review: Whether the Court of Appeals and the labor tribunals erred in their appreciation of the evidence, such that the factual findings warrant reversal in a petition for review on certiorari.
• Nature of Employment: Whether Tuppil, et al. and Borja, et al. are regular employees or fixed-term contractual employees.
• Illegal Dismissal: Whether the termination of the services of Tuppil, et al. and Borja, et al. upon the expiration of the contract between LBP Service and Land Bank constituted illegal dismissal.
• Voluntariness of Resignation: Whether the resignation of Tuppil, et al. was voluntary.

• Scope of Review: No. The appreciation of evidence is a question of fact beyond the ambit of the Court's jurisdiction in a petition for review on certiorari under Rule 45, most especially where the Court of Appeals, the NLRC, and the Labor Arbiter speak as one in their findings and conclusions, and no exception obtains.
• Nature of Employment: No. Tuppil, et al. and Borja, et al. are fixed-term contractual employees, having knowingly and voluntarily agreed to the fixed periods and conditions stipulated in their employment contracts without force, duress, or improper pressure.
• Illegal Dismissal: No. Contracts of employment for a fixed period terminate on their own at the end of such period, and no notice of termination was required because the workers knew exactly when their contracts would end.
• Voluntariness of Resignation: Yes, the resignation was voluntary. Tuppil, et al. failed to substantiate their bare allegations of involuntariness, and their resignation letters, coupled with their subsequent employment with another manpower agency deployed to Land Bank, manifested their intention to sever the employment relationship.

• Scope of Review: The question raised by Tuppil, et al. and Borja, et al. regarding the Court of Appeals and the labor tribunals' appreciation of the evidence is one of fact and is beyond the ambit of the Court's jurisdiction in a petition for review on certiorari. It is not the Court's task to go over the evidence presented below to ascertain if it was appreciated and weighed correctly, most especially when the Court of Appeals, the NLRC, and the Labor Arbiter speak as one in their findings and conclusions. While the rule of limited jurisdiction admits of exceptions, none exists in the instant case.

• Nature of Employment: Contracts of employment for a fixed term are not unlawful unless it is apparent from the circumstances that the periods have been imposed to circumvent the laws on security of tenure. Pure Foods Corporation vs. NLRC laid down the criteria of a valid fixed-term employment: (1) the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or (2) it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. Here, Tuppil, et al. and Borja, et al. were employed on a contract basis to meet LBP Service's commitment to its client; at the time of their hiring, they were informed that their engagement was for a specific period; and their employment contracts expressly stipulated the duration of their services, including the causes for recall or end of employment such as voluntary resignation, non-renewal or termination of LBP Service's contract with the client company, and the client's cessation of need for the worker's services. No evidence indicated that they were pressured into signing their fixed-term contracts or that LBP Service exhibited dominance over them; they had the chance to refuse but consciously accepted their contracts, and the periods and conditions stipulated were not intended to deny them security of tenure. Their claim of regular employment is untenable, because the fact that an employee is engaged to perform activities necessary and desirable in the usual business of the employer does not prohibit the fixing of employment for a definite period. As elucidated in St. Theresa's School of Novaliches Foundation vs. NLRC, Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided the same is entered into by the parties without force, duress, or improper pressure and absent any other circumstance vitiating consent; it does not necessarily follow that where the employee's duties consist of activities usually necessary or desirable in the employer's usual business, the parties are forbidden from agreeing on a period of time for the performance of such activities, there being nothing essentially contradictory between a definite period of employment and the nature of the employee's duties.

• Illegal Dismissal: There was no illegal dismissal when the services of Tuppil, et al. and Borja, et al. were terminated after the contract between LBP Service and Land Bank expired. There was even no need for a notice of termination because they knew exactly when their contracts would end; contracts of employment for a fixed period terminate on their own at the end of such period. Notably, Tuppil, et al. and Borja, et al. could still be deployed to other clients, yet Tuppil, et al. opted not to wait for the reassignments and submitted their resignation letters.

• Voluntariness of Resignation: The Labor Arbiter's discussion on the voluntariness of the resignation was quoted with approval. Since Tuppil, et al. submitted resignation letters, it was incumbent upon them to prove that their resignation was in fact involuntary, and they failed to substantiate their bare allegations of involuntariness. They even admitted during the mandatory conference on September 16, 2014 that they were already working for another manpower agency which in turn deployed them to Land Bank; their intention was clear — they resigned from LBPSC simply because they wanted to continue being deployed to Land Bank, an overt act manifesting their intention to sever the employment relationship. The resignation letters showed that their resignations were moved by personal and professional reasons, and they even expressed gratitude to LBPSC, with Ramacula specifically stating that he was transferring to LBPRDC, presumably Land Bank's new manpower agency; such statements could not be construed as indications that they were forced to resign, and the expressions of gratitude could not have come from employees forced by their employer to resign. Their intention to leave their posts became more evident when they refused to accept LBP Service's offer to report back for work so they could be deployed to other clients. Neither did the filing of a complaint for illegal dismissal suggest the involuntariness of their resignation, since it did not include a prayer for reinstatement. In sum, the Court of Appeals and the labor tribunals did not commit grave abuse of discretion in denying the complaint for illegal dismissal; grave abuse of discretion refers to the arbitrary, capricious, whimsical, or despotic exercise of judgment as when the assailed order is bereft of any factual and legal justification, and there is none in this case.

• Validity of Fixed-Term Employment — A contract of employment for a fixed term is not unlawful unless it is apparent from the circumstances that the periods have been imposed to circumvent the laws on security of tenure. The Court applied this rule to uphold the contracts of Tuppil, et al. and Borja, et al., finding no indication that the stipulated periods were designed to deny them security of tenure.
• Pure Foods Criteria for a Valid Fixed-Term Employment — A fixed-term employment contract is valid where either: (1) the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or (2) it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. The Court found both criteria satisfied, as the workers were informed of the specific period at hiring, the contracts expressly stipulated the duration and the causes for recall or end of employment, and no evidence showed pressure or dominance by LBP Service.
• Necessary and Desirable Activities Do Not Bar a Fixed Period — The fact that an employee is engaged to perform activities necessary and desirable in the usual business of the employer does not prohibit the fixing of employment for a definite period; Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided it is entered into without force, duress, or improper pressure and absent any other circumstance vitiating consent. There is nothing essentially contradictory between a definite period of employment and the nature of the employee's duties. This defeated the petitioners' claim that they were regular employees by reason of the nature of their work.
• Self-Termination of Fixed-Term Contracts — Contracts of employment for a fixed period terminate on their own at the end of such period, and no notice of termination is required because the employees know exactly when their contracts will end. The Court applied this to hold that the expiration of the LBP Service–Land Bank contract produced no illegal dismissal.
• Voluntariness of Resignation — The employee bears the burden of proving that a resignation was involuntary, bare allegations being insufficient for that purpose. The Court relied on the resignation letters' personal and professional reasons, the expressions of gratitude to the employer, the workers' admission that they were already working for another manpower agency deployed to Land Bank, and the absence of a prayer for reinstatement in the complaint to conclude that the resignation was voluntary.
• Grave Abuse of Discretion — Grave abuse of discretion refers to the arbitrary, capricious, whimsical, or despotic exercise of judgment, as when the assailed order is bereft of any factual and legal justification. The Court found none in the challenged rulings of the Court of Appeals and the labor tribunals.
• Limited Jurisdiction under Rule 45 — The appreciation of evidence is a question of fact beyond the ambit of the Court's jurisdiction in a petition for review on certiorari, especially where the Court of Appeals, the NLRC, and the Labor Arbiter uniformly reached the same findings and conclusions, and no exception applies.

• "Contracts of employment for a fixed term are not unlawful unless it is apparent from the circumstances that the periods have been imposed to circumvent the laws on security of tenure." — This is the ratio decidendi on the validity of fixed-term employment, framing the inquiry as whether the stipulated period was a device to circumvent security of tenure rather than a legitimate term of engagement.
• "1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or 2. It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter." — The canonical formulation of the Pure Foods Corporation vs. NLRC criteria, which the Court applied to sustain the validity of the petitioners' fixed-term contracts.
• "Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided the same is entered into by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating consent. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employee's duties." — Quoted from St. Theresa's School of Novaliches Foundation vs. NLRC, this passage disposes of the argument that the performance of necessary and desirable work converts a fixed-term employee into a regular one.
• "Contracts of employment for a fixed period terminate on their own at the end of such period." — This states the consequence of a valid fixed-term engagement and supplies the ground for rejecting the claim of illegal dismissal upon the expiration of the LBP Service–Land Bank contract.

• Pure Foods Corporation vs. NLRC, 347 Phil. 434 (1997) — The controlling precedent laying down the two criteria for a valid fixed-term employment, which the Court applied to uphold the petitioners' contracts.
• St. Theresa's School of Novaliches Foundation vs. NLRC, 351 Phil. 1038 (1998) — Followed for the proposition that Article 280 of the Labor Code does not proscribe a fixed-period contract and that there is no contradiction between a definite period and the performance of activities necessary or desirable to the employer's business.
• Caparoso vs. Court of Appeals, 544 Phil. 721 (2007) — Cited in support of the ruling that engaging an employee to perform activities necessary and desirable in the employer's usual business does not prohibit the fixing of employment for a definite period.
• Labayog vs. M.Y. San Biscuits, Inc., 527 Phil. 67 (2006) — Cited for the rule that contracts of employment for a fixed period terminate on their own at the end of such period.
• Senate Blue Ribbon Committee vs. Majaducon, 455 Phil. 61 (2003) — Cited for the definition of grave abuse of discretion as the arbitrary, capricious, whimsical, or despotic exercise of judgment, as when the assailed order is bereft of any factual and legal justification.
• Agayan vs. Kital Philippines Corporation, Inc., G.R. No. 229703, December 4, 2019; Pascual vs. Burgos, 776 Phil. 167 (2016); Bacsasar vs. Civil Service Commission, 596 Phil. 858 (2009) — Cited collectively in support of the rule that factual questions are beyond the Court's jurisdiction in a petition for review on certiorari, particularly where the findings below are uniform.

• Article 279, Labor Code — Referred to by the Labor Arbiter in clarifying that the order for Borja, et al. to report back to work was not a reinstatement order contemplated under Article 279, for the simple reason that there was no finding of dismissal, much less an illegal one.
• Article 280, Labor Code — Construed through St. Theresa's School of Novaliches Foundation vs. NLRC as not proscribing or prohibiting an employment contract with a fixed period, provided it is entered into without force, duress, or improper pressure and absent any other circumstance vitiating consent; the provision does not forbid the parties from agreeing on a period of time for the performance of activities usually necessary or desirable in the employer's business.
• Rule 45, Rules of Court — The procedural basis of the petition for review on certiorari; the Court applied the rule limiting its jurisdiction to questions of law, holding that the petitioners' challenge to the appreciation of evidence raised a question of fact and that no exception to the rule obtained.

Peralta, C.J., Caguioa, J. Reyes, Jr., and Lazaro-Javier, JJ., concur.