FIXED-TERM EMPLOYMENT REQUIRES PROOF OF ENGAGEMENT

Fixed-term employment is not a form of employment found under the Labor Code. Its basis is found under the Civil Code and has been duly recognized by the Supreme Court.

However, proof of such arrangement must be presented by the employer as held by the Supreme Court in the following case:

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Romeo Basan, et al. vs. Coca-Cola Bottlers Philippines
G.R. Nos. 174365-66, February 4, 2015

Facts:

Complainants Romeo Basan, Danilo Dizon, Jaime L. Tumabiao, Jr., Roberto Dela Rama, Jr., Ricky S. Nicolas, Crispulo D. Donor, Galo Falguera (complainants) filed a complaint for illegal dismissal with money claims against Coca-Cola Coca-Cola Bottlers Philippines, alleging that Coca-Cola dismissed them without just cause and prior written notice required by law.

Coca-Cola, however, countered that it hired Complainants as temporary route helpers to act as substitutes for its absent regular route helpers merely for a fixed period in anticipation of the high volume of work in its plants or sales offices. As such, Complainants’ claims have no basis for they knew that their assignment as route helpers was temporary in duration.

LA Ruling:

The Labor Arbiter ruled in favor of Complainants and found that since they were performing activities necessary and desirable to the usual business of Complainant for more than the period for regularization, Complainants are considered as regular employees, and thus, their dismissal was done contrary to law in the absence of just cause and prior written notice.

Thus, it ordered Coca-Cola to reinstate Complainants with full backwages from the time their salaries were withheld until their actual reinstatement and to pay their lump sum increase extended to them in their collective bargaining agreement, their accrued vacation and sick leave benefits, as well as monetary awards and attorney’s fees

NLRC Ruling:

The NLRC affirmed the Labor Arbiter’s decision and rejected Coca-Cola’s contention that Complainants were merely employed for a specific project or undertaking the completion or termination of which has been determined at the time of their engagement. It stressed that nowhere in the records of the case was it shown that Complainants were hired as project or seasonal employees, Coca-Cola having failed to submit any contract of project or other similar proof thereof.

It also noted that neither can Complainants be considered as probationary employees for the fact that they had performed their services for more than six (6) months. In addition, the NLRC upheld the Labor Arbiter’s ruling that Complainants, as route helpers, performed work directly connected or necessary and desirable in Coca-Cola’s ordinary business of manufacturing and distributing its softdrink products.

Thus, Coca-Cola failed to overcome Complainants’ assertion that they were regular employees. As such, their employment could only be terminated with just cause and after the observance of the required due process. Thereafter, the subsequent motion for reconsideration filed by Coca-Cola was further denied by the NLRC.

Coca-Cola filed a petition for certiorari with the CA alleging grave abuse of discretion on the part of the NLRC in finding that Complainants were regular employees. In the meantime, Complainants filed before the Labor Arbiter a Motion for Issuance of a Writ of Execution, to which Coca-Cola filed a Manifestation and Motion with attached Opposition.

On March 25, 2004, the Labor Arbiter ordered that the Writ of Execution be issued, which was affirmed by the NLRC. Consequently, Coca-Cola filed another petition for certiorari claiming that the NLRC committed grave abuse of discretion in directing the execution of a judgment, the propriety and validity of which was still under determination of the appellate court.

CA Ruling:

The CA consolidated Coca-Cola’s two (2) petitions for certiorari and reversed the rulings of the NLRC and the Labor Arbiter.

The CA held that the fact that Complainants “performed duties which are necessary or desirable in the usual trade or business of Coca-Cola,” is of no moment. This is not the only standard for determining the status of one’s employment. Such fact does not prevent them from being considered as fixed term employees of Coca-Cola whose engagement was “fixed” for a specific period. The Coca-Cola’s repeated hiring for various periods (ranging from more than six months for private Coca-Cola Basan to eight years in the case of private Coca-Cola Dizon) would not automatically categorize them as REGULAR EMPLOYEES.

The CA further held that It being supported by facts on record and there being no showing that the employment terms were foisted on the employees through circumstances vitiating or diminishing their consent, following Brent School, Inc. vs. Zamora (G.R. No. 48494, Feb. 5, 1990), the Coca-Colas must be considered as fixed term employees whose “seasonal employment” or employment for a “period” have been “set down.” After all, as conceded by Brent, fixed term employment continues to be allowed and enforceable in this jurisdiction. Not being permanent regular employees, it must be held that the Coca-Colas are not entitled to reinstatement and payment of full backwages.

Complainants sought a reconsideration of the CA’s Decision on procedural and substantive grounds. The CA denied Complainants’ motion for reconsideration.

Hence, the instant petition

Issue/s:

Whether or not there can be fixed-term employment in the absence of proof of such engagement.

SC Ruling:

As to the issue of fixed-term employment, the SC, citing the case of Brent School vs. Zamora, held that under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or for specific projects with pre-determined dates of completion; they also include those to which the parties by free choice have assigned a specific date of termination. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily 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 where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter.

Thus, under the above Brent doctrine, while it was not expressly mentioned in the Labor Code, this Court has recognized a fixed-term type of employment embodied in a contract specifying that the services of the employee shall be engaged only for a definite period, the termination of which occurs upon the expiration of said period irrespective of the existence of just cause and regardless of the activity the employee is called upon to perform. Considering, however, the possibility of abuse by employers in the utilization of fixed-term employment contracts, the SC, in Brent, laid down the following criteria to prevent the circumvention of the employee’s security of tenure:

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 records of this case is bereft of any proof which will show that Complainants freely entered into agreements with Coca-Cola to perform services for a specified length of time. In fact, there is nothing in the records to show that there was any agreement at all, the contracts of employment not having been presented.

While fixed term employment is not per se illegal or against public policy, the criteria above must first be established to the satisfaction of the Court. Yet, the records of this case reveal that for years, Complainants were repeatedly engaged to perform functions necessary to Coca-Cola’s business for fixed periods short of the six-month probationary period of employment.

If there was really no intent to circumvent security of tenure, Coca-Cola should have made it clear to Complainants that they were being hired only for fixed periods in an agreement freely entered into by the parties. To the Court, Coca-Cola’s act of hiring and re-hiring Complainants for periods short of the legal probationary period evidences its intent to thwart Complainant’s security of tenure, especially in view of an awareness that ordinary workers, such as Complainants herein, are never on equal terms with their employers. It is rather unjustifiable to allow Coca-Cola to hire and rehire Complainants on fixed terms, never attaining regular status.

Hence, in the absence of proof showing that Complainants knowingly agreed upon a fixed term of employment, the SC upheld the findings of the Labor Arbiter and the NLRC and so rule that Complainants are, indeed, regular employees, entitled to security of tenure. Consequently, for lack of any clear, valid, and just or authorized cause in terminating Complainants’ employment, it was ruled that Coca-Cola was guilty of illegal dismissal.