DAY CERTAIN, NOT NECESSITY AND DESIRABILITY, IS THE DETERMINANT OF FIXED-TERM EMPLOYMENT

Jamias vs. NLRC

G.R. No. 159350, March 9, 2016

Facts:

Respondent  Innodata  Philippines,  Inc.  (Innodata), a  domestic corporation engaged in the business of data processing and conversion for foreign clients. Petitioners Jamias, et al, were hired by petitioner Innodata. After their respective contracts expired, they filed a complaint for illegal dismissal claiming that Innodata had made it appear that they had  been hired as project employees in order to prevent them from becoming regular employees.

LA Ruling:

The Labor  Arbiter  (LA) rendered his decision dismissing the complaint for lack of merit. He found and held that the petitioners had knowingly signed their respective contracts in which the durations of their engagements were clearly stated; and that their fixed term contracts, being exceptions to Article 280 of the Labor Code, precluded their claiming regularization.

NLRC Ruling:

On appeal, the NLRC affirmed the decision of LA Layawen, opining that Article 280 of the Labor Code did not prohibit employment contracts with fixed periods provided the contracts had been voluntarily entered into by the parties.

CA Ruling:

The CA upheld the NLRC. It observed that the desirability and necessity of the functions  being  discharged  by the petitioners did not make them regular employees; that Innodata and the employees could still validly enter into their contracts of employment for a fixed period provided they had agreed upon the same at the time of the employees’ engagement; that Innodata’s operations were contingent on job orders or undertakings for its foreign clients; and that the availability of contracts from foreign clients, and the duration of the employments could not be treated as permanent, but coterminous with the projects. The petitioners moved for reconsideration, but the CA denied their motion on August 8, 2003. Hence, the appeal by only three of the original complainants

Issue/s:

Whether or not the employment was for fixed-term or regular

SC Ruling:

The SC denied the petition.

Fixed term agreement, to be valid, must strictly conform with the requirements and conditions provided in Article 280 of the Labor Code.  The test to determine whether a particular employee is engaged as a project or regular employee is whether or not the employee is assigned to carry out a specific project or undertaking, the duration or scope of which was specified at the time of his engagement. There must be a determination of, or a clear agreement on, the completion or termination of the project at the time the employee is engaged. Otherwise put, the fixed period of employment must be 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 it must satisfactorily appear that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatsoever being exercised by the former on the latter.

The contracts of the petitioners indicated the one-year duration of their engagement as well as their respective project assignments (i.e., Jamias being assigned to the CD-ROM project; Cruz and Matuguinas to the TSET project). There is no indication that the petitioners were made to sign the contracts against their will. Neither did they refute Innodata’s assertion that it did not employ force, intimidate or fraudulently manipulate the petitioners into signing their contracts, and that the terms thereof had been explained and made known to them. Hence, the petitioners knowingly agreed to the terms of and voluntarily signed their respective contracts.

That Innodata drafted the contracts with its business interest as the overriding consideration did not necessarily warrant the holding that the contracts were prejudicial against the petitioners. The fixing by Innodata of the period specified in the contracts of employment did not also indicate its ill-motive to  circumvent  the  petitioners’  security  of  tenure.  Indeed, the petitioners  could  not  presume  that  the  fixing  of  the  one-year  term  was intended to evade or avoid the protection to tenure under Article 280 of the Labor Code in the absence of other evidence establishing such intention. This presumption must ordinarily be based on some aspect of the agreement other than  the  mere  specification  of  the  fixed  term  of  the  employment agreement, or on evidence aliunde of the intent to evade. The necessity and desirability of the work performed by the employees are not the determinants in term employment, but rather the “day certain” voluntarily agreed upon  by  the  parties.

In fine, the employment of the petitioners who were engaged as project employees for a fixed term legally ended upon the expiration of their contract. Their complaint for illegal dismissal was plainly lacking in merit.