Universal Robina Sugar Milling Corporation vs. Acibo

Workers repeatedly hired to perform the same tasks necessary and desirable to an employer's seasonal business operations are regular seasonal employees, not project employees, and are not entitled to CBA benefits negotiated for year-round regular employees, because they constitute a bargaining unit separate and distinct from employees who perform tasks regardless of the changing seasons.

URSUMCO is a domestic corporation engaged in the sugar cane milling business; Cabati is its Business Unit General Manager. The respondents were employees of URSUMCO hired on various dates between February 1988 and April 1996 in different capacities—drivers, crane operators, bucket hookers, welders, mechanics, laboratory attendants and aides, steel workers, laborers, carpenters and masons, among others. At the start of their respective engagements, the respondents signed contracts of employment for a period of one month or for a given season. URSUMCO repeatedly hired the respondents to perform the same duties and, for every engagement, required them to sign new employment contracts for the same duration.

URSUMCO is a domestic corporation engaged in the sugar cane milling business, with Cabati serving as its Business Unit General Manager. The respondents were employees of URSUMCO hired on various dates between February 1988 and April 1996 and in different capacities—drivers, crane operators, bucket hookers, welders, mechanics, laboratory attendants and aides, steel workers, laborers, carpenters and masons, among others. At the start of their respective engagements, the respondents signed contracts of employment for a period of one month or for a given season. URSUMCO repeatedly hired the respondents to perform the same duties and, for every engagement, required them to sign new employment contracts for the same duration of one month or a given season.

On August 23, 2002, the respondents filed before the Labor Arbiter complaints for regularization, entitlement to benefits under the existing Collective Bargaining Agreement, and attorney's fees. The Labor Arbiter dismissed the complaint on October 9, 2002, holding that the respondents were seasonal or project workers and not regular employees, as they were required to perform for a definite period phases of URSUMCO's projects that were not directly related to its main operations. The LA further ruled that as project employees, the respondents could not be regularized and were not entitled to CBA benefits, which covered only regular employees.

Of the twenty-two original complainants, seven appealed the LA's ruling before the NLRC. The NLRC reversed the LA on July 22, 2005, declaring the complainants regular employees of URSUMCO and granting their monetary claims under the CBA, finding that they performed activities usually necessary and desirable in URSUMCO's business and had been repeatedly hired for the same undertaking every season. The petitioners moved for reconsideration, which the NLRC denied on April 28, 2006. The petitioners then elevated the case to the CA via a petition for certiorari.

The CA, in its November 29, 2007 decision, granted the petition in part. It affirmed the NLRC's finding that the complainants were regular employees but characterized them as regular seasonal employees and deleted the grant of CBA benefits. The CA reasoned that the complainants' tasks were necessary, if not indispensable, to URSUMCO's business and that their repeated and continuing performance of the same tasks for at least one year constituted sufficient evidence of the necessity of the activity. The CA further noted that the petitioners failed to prove they gave the complainants opportunity to work elsewhere during the off-season, and that even during the off-season, seasonal workers are not separated from the service but are simply considered on leave until re-employed. On the CBA claim, however, the CA ruled that the complainants did not belong to the same bargaining unit as year-round regular employees and could not be covered by the CBA. The petitioners filed the present petition after the CA denied their motion for partial reconsideration on January 22, 2009.

• Employment Status: Petitioners maintained that the respondents were contractual or project/seasonal workers and not regular employees of URSUMCO, arguing that the CA erred in applying the legal parameters for regular employment to the respondents' case.
• Applicability of Article 280 Standards: Petitioners contended that the legal standards—length of engagement and desirability or necessity of work—apply only to regular employees under paragraph 1, Article 280, and to casual employees deemed regular by length of service under paragraph 2, and not to project or seasonal workers.
• Fixed Duration of Engagement: Petitioners asserted that the respondents were specifically engaged for a fixed and predetermined duration of, on the average, one month at a time, coinciding with a particular phase of URSUMCO's business operations or sugar milling season, and that by the nature of their engagement, the respondents' employment legally ended upon the end of the predetermined period, leaving URSUMCO under no legal obligation to rehire them.

• Regular Employment Status: Respondents maintained that they were regular employees of URSUMCO, relying on the NLRC and CA rulings, pointing out that they had been continuously working for URSUMCO for more than one year performing tasks necessary and desirable to URSUMCO's business.

• Employment Status: Whether the respondents are regular employees of URSUMCO.
• Affirmative Relief for Non-Appealing Complainants: Whether affirmative relief can be given to the fifteen complainants who did not appeal the LA's decision.

• Employment Status: No. The respondents are regular seasonal employees, not unqualified regular employees entitled to CBA benefits. The NLRC committed grave abuse of discretion in declaring them regular employees without qualification, and the CA reversibly erred in upholding that ruling.
• Affirmative Relief for Non-Appealing Complainants: Academic. The issue became moot because the complaint was dismissed for lack of merit.

• Employment Status: Article 280 of the Labor Code provides for three kinds of employment arrangements: regular, project/seasonal, and casual. Regular employment exists where the employee performs activities usually necessary or desirable in the employer's usual business or trade; the primary standard is the reasonable connection between the activity performed and the employer's business. Project employment requires (1) designation of a specific project or undertaking and (2) clear determination of completion or termination at the time of engagement. Seasonal employment operates similarly, involving work lasting for the duration of the season; to exclude a "seasonal" employee from regular status, the employer must show that the work is seasonal in nature and that the employee was employed for the duration of the season. However, when seasonal workers are continuously and repeatedly hired to perform the same tasks for several seasons, this length of time serves as a badge of regular employment. Even during the off-season, seasonal workers are not separated from the service but are merely considered on leave until re-employed.

  Applying these parameters, the respondents were found to be regular seasonal employees for three reasons. First, the respondents performed tasks—loader operators, hookers, crane operators, drivers, laboratory attendants, welders, carpenters, and utility workers—that were regularly and habitually needed during the milling season and did not pertain to any specific phase that would cease upon completion. These duties were necessary to haul and transport sugarcane, mill sugar, and ensure the smooth and continuous operation of the mill. Second, the respondents were regularly and repeatedly hired to perform the same tasks year after year, which placed them within the established system of regular seasonal employment in the sugar industry. This system involves two different sets of workers for two separate seasons—plantation workers for the growing season and mill employees for the milling season—neither working continuously for one whole year. Third, the records did not support the petitioners' assertion that the respondents were free to work elsewhere during the off-season, as there was no evidence that the respondents sought and obtained employment elsewhere after completing their tasks at URSUMCO. The case of Mercado, Sr. vs. NLRC was distinguished, as the workers there were hired for definite periods of agricultural work, were free to offer services to other farm owners, were not regularly and repeatedly hired for the same phase of work, and the employer sufficiently proved these circumstances.

  The NLRC committed grave abuse of discretion by declaring the respondents regular employees without qualification and granting CBA benefits, when it acknowledged that the respondents worked only during the milling season yet ignored the established distinctions between regular seasonal employees and year-round regular employees. The CA reversibly erred in upholding the NLRC's flawed decision. Regular seasonal employees should not be confused with regular employees such as administrative or office personnel who perform tasks year-round regardless of the season, and they constitute a bargaining unit separate and distinct from year-round regular employees.

• Affirmative Relief for Non-Appealing Complainants: Because the complaint was dismissed for lack of merit, the issue of granting affirmative relief to the fifteen complainants who did not appeal the LA decision became academic and required no separate resolution.

• Regular Seasonal Employment — Seasonal workers who are continuously and repeatedly hired to perform the same tasks or activities for several seasons attain the status of regular seasonal employees. Even though denominated as "seasonal workers," if these workers are called to work from time to time and are only temporarily laid off during the off-season, the law does not consider them separated from the service during the off-season period but simply considers them on leave until re-employed. The Court applied this doctrine to sugar mill workers repeatedly hired each milling season, distinguishing them from both project employees (whose services are coterminous with a specific project) and year-round regular employees (who perform tasks regardless of the season).

• Project Employment Requirements — To remove an engagement from the presumption of regularity of employment, two requirements must be satisfied: (1) designation of a specific project or undertaking for which the employee is hired, and (2) clear determination of the completion or termination of the project at the time of the employee's engagement. The Court found these requirements unsatisfied because the respondents' tasks did not pertain to any specific phase of URSUMCO's milling operations that would ultimately cease upon completion of a particular phase.

• Fixed-Term Employment (Brent School Doctrine) — First recognized in Brent School, Inc. vs. Zamora, a fixed-term employment agreement is valid when knowingly and voluntarily agreed upon by the parties absent circumstances vitiating consent, and where the employer and employee dealt with each other on more or less equal terms. The restrictive clause in Article 280 should be construed to refer to agreements entered into precisely to circumvent security of tenure. Where the employer imposed the period precisely to preclude the employee from acquiring tenurial security, the law will disregard the period and the employee shall be deemed regular.

• Bargaining Unit Distinction — Regular seasonal employees constitute a bargaining unit separate and distinct from year-round regular employees and cannot be automatically governed by a CBA negotiated for the latter, due to differences in the nature of their duties and the duration of their work vis-à-vis the operations of the company.

• "In light of the above legal parameters laid down by the law and applicable jurisprudence, the respondents are neither project, seasonal nor fixed-term employees, but regular seasonal workers of URSUMCO." — This passage states the Court's core classification of the respondents' employment status, the central ratio decidendi of the case.

• "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 formulation articulates the controlling test for when seasonal workers attain regular seasonal employment status, a principle frequently cited in subsequent labor jurisprudence.

• "even though denominated as 'seasonal workers,' if these workers are called to work from time to time and are only temporarily laid off during the off-season, the law does not consider them separated from the service during the off-season period. The law simply considers these seasonal workers on leave until re-employed." — This passage defines the legal status of seasonal workers during the off-season, a canonical formulation of the doctrine of regular seasonal employment.

• "the nature of the employment does not depend solely on the will or word of the employer or on the procedure for hiring and the manner of designating the employee. Rather, the nature of the employment depends on the nature of the activities to be performed by the employee, considering the nature of the employer's business, the duration and scope to be done, and, in some cases, even the length of time of the performance and its continued existence." — This passage articulates the comprehensive framework for determining employment status, emphasizing the multifactor analysis over the employer's unilateral characterization.

• Brent School, Inc. vs. Zamora, 260 Phil. 747 (1990) — Recognized for the first time the validity of fixed-term employment agreements, holding that Article 280's restrictive clause should be construed to refer only to agreements entered into to circumvent security of tenure. The Court relied on this case to distinguish fixed-term employment from the respondents' arrangement.
• Mercado, Sr. vs. NLRC, 278 Phil. 345 (1991) — Distinguished. In Mercado, workers were hired for definite periods of agricultural work, were free to offer services to other farm owners, were not regularly and repeatedly hired for the same phase, and the employer proved these circumstances. The Court found Mercado inapplicable to the respondents because the records lacked evidence that the respondents sought employment elsewhere during the off-season.
• Hda. Fatima vs. Nat'l Fed. of Sugarcane Workers-Food and Gen. Trade, 444 Phil. 587 (2003) — Followed. The Court reiterated the observations distinguishing sugar mill workers from agricultural farm workers, supporting the system of regular seasonal employment in the sugar industry.
• Hacienda Bino/Hortencia Starke, Inc. vs. Cuenca, 496 Phil. 198 (2005) — Followed. Cited for the same observations distinguishing the employment arrangements in the sugar industry, reinforcing the two-season system of regular seasonal employment.
• Abasolo vs. National Labor Relations Commission, 400 Phil. 86 (2000) — Followed. Cited for the principle that seasonal workers called to work from time to time and temporarily laid off during the off-season are not separated from the service but are merely considered on leave until re-employment.
• De Leon vs. National Labor Relations Commission, 257 Phil. 626 (1989) — Followed. Cited for the primary standard of determining regular employment: the reasonable connection between the particular activity performed by the employee and the usual business or trade of the employer.

• Article 280, Labor Code — Defines regular, project/seasonal, and casual employment. The Court applied paragraph 1 (regular employment based on necessary or desirable activities), the exception for project employment (fixed for a specific project with determined completion), and the exception for seasonal employment (work seasonal in nature, employment for the duration of the season). The Court also applied paragraph 2 (casual employees deemed regular after one year of service). The provision was central to classifying the respondents as regular seasonal employees rather than project employees or unqualified regular employees.

Antonio T. Carpio (Chairperson), Mariano C. Del Castillo, Jose Portugal Perez, and Estela M. Perlas-Bernabe concurred.