FIXED-TERM CONTRACT THAT HAS BEEN CONTINUOUSLY EXTENDED OR RENEWED INDICATES REGULAR EMPLOYMENT

Fixed-term employment contract was repeatedly extended or renewed covering the same position, and involving the same duties. Case law holds that the repeated engagement under a contract of hire is indicative of the necessity and desirability of the employee’s work in the employer’s business. If an employee’s contract has been continuously extended or renewed for the same position, with the same duties, without any interruption, then such employee is a regular employee.

Thus, the SC held in an August 2019 case, as follows:

Dela Rosa vs. ABS-CBN Corporation
G.R. No. 242875, August 28, 2019

Fixed-term employee; Repeated engagement under a contract of hire is indicative of the necessity and desirability of the employee’s work in the employer’s business; If an employee’s contract has been continuously extended or renewed for the same position, with the same duties, without any interruption, then such employee is a regular employee; An alleged fixed-term employment contract that was imposed to prevent the acquisition of tenurial security is not shown to be mutually advantageous to both parties or reasonably necessary to ABS-CBN’s business; Procedural due process; A notice of dismissal that was not served due allegedly to the expiration of fixed-term contract of a regular employee violates the procedural due process; Serious misconduct

Facts:

Petitioner Augorio Dela Rosa (Dela Rosa) was hired by respondent ABS-CBN Corporation (ABS-CBN) as a video editor for the latter’s television broadcasting. He was allegedly rehired repeatedly and continuously for the same position, under purported fixed-term contracts.

In 2013, Dela Rosa admittedly reported for work and went to ABS-CBN’s editing bay while intoxicated. This led to an incident where Dela Rosa placed his hands inside a female co-worker’s pants and touched her buttocks.

Thus, Dela Rosa was given a show cause memorandum, to which he submitted an answer explaining that the alleged incident was only accidental, as he just lost balance and fell towards said co-worker. Subsequently, administrative hearings were conducted.

On September 1, 2015, ABS-CBN served a memorandum to Dela Rosa informing him of management’s decision to “impose on [him] the penalty of dismissal.” However, ABS-CBN claimed that it can no longer effect the same, since Dela Rosa’s program contract dated August 16, 2013 had already expired on December 31, 2013, and his “current program contract dated March 16, 2015 to September 15, 2015 no longer covers the incident.”

Aggrieved, Dela Rosa filed a complaint for illegal dismissal, among others. For its part, ABS-CBN averred that Dela Rosa was not illegally dismissed. It maintained that Dela Rosa was engaged only for a fixed period or from March 16, 2015 until September 15, 2015, and consequently, his employment automatically ceased on the end date.

ABS-CBN also claimed that even if Dela Rosa’s employment had not yet expired, the latter was dismissed for a just cause for having been found guilty of serious misconduct in: (a) reporting for work while intoxicated; and (b) committing lascivious acts against a female co-worker.

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LA Ruling:

The Labor Arbiter (LA) found Dela Rosa to have been illegally dismissed.

The LA ruled that Dela Rosa was a regular employee of ABS-CBN considering that he was engaged to perform an activity that has a reasonable connection to the business or trade of ABS-CBN. Consequently, Dela Rosa’s dismissal due to “end of contract” was illegal because it is not one of the just or authorized causes provided by law.

In this regard, the LA added that the inconsistent stand of ABS-CBN in declaring Dela Rosa to have been validly dismissed due to serious misconduct, on one hand, and end of contract, on the other, worked against its favor.

Aggrieved, ABS-CBN appealed to the NLRC.

NLRC Ruling:

The NLRC affirmed the LA’s Decision with modification, deleting the award of moral and exemplary damages.

The NLRC explained that the provision in Dela Rosa’s employment contract fixing the period of his employment was unjustified, since ABS-CBN failed to show that the same was mutually advantageous and not intended to defeat Dela Rosa’s right to security of tenure. It added that the circumstances of Dela Rosa’s employment indicated regular employment, as Dela Rosa was continuously engaged by ABS-CBN for the same position, although under different employment contracts.

Notably, the NLRC opined that Dela Rosa may not be declared validly dismissed on the ground of serious misconduct, considering that ABS-CBN terminated his services on the ground of expiration of contract. The NLRC, upon ABS-CBN’s motion for partial reconsideration, modified its April 27, 2017 Decision by reckoning the computation of separation pay from February 1, 2002.

The matter was elevated to the CA via a petition for certiorari.

CA Ruling:

The CA granted the petition and nullified the findings of the NLRC.

It found Dela Rosa to be a regular employee who was validly dismissed for a just cause. Particularly, Dela Rosa was found guilty of serious misconduct in reporting for work under the influence of alcohol and committing lewd or lascivious acts against his female co-worker.

Moreover, the twin requirements of notice and hearing were complied with, considering that: (a) Dela Rosa was given a show cause order, to which he filed his answer; ( b) during the administrative hearings, Dela Rosa was able to testify and present evidence in his favor; and (c) Dela Rosa was informed of ABS-CBN’s decision to terminate him.

Dela Rosa moved for reconsideration but the same was denied. Hence, the petition before the SC.

Issue/s:

Whether or not repeated engagement of an allegedly fixed-term employee indicates necessity and desirability of his work

Whether or not an employee’s contract that has been continuously extended or renewed for the same position, with the same duties, without any interruption, is considered a regular employee

Whether or not an employee who, in inebriated state, repeatedly attempted to kiss a female co-worker and eventually, touched her buttocks is guilty of serious misconduct

Whether or not a notice of dismissal that was not served on an allegedly fixe-term employee due to expiration of employment contract violates procedural due process when such employee was held as regular and validly dismissed from service

SC Ruling:

The SC found the petition partly meritorious.

The SC held that while there are other contracts intermittently spanning the years 2014 to 2015, it is  nonetheless clear from the foregoing that Dela Rosa was under the employ of ABS-CBN for a  period of at least three (3) years without interruption.

Dela Rosa’s employment contracts during said period had been repeatedly extended or renewed covering the same position, and involving the same duties. Case law holds that the repeated engagement under a contract of hire is indicative of the necessity and desirability of the employee’s work in the employer’s business. If an employee’s contract has been continuously extended or renewed for the same position, with the same duties, without any interruption, then such employee is a regular employee.

Moreover, the fixed terms were not shown to be mutually advantageous to both parties or reasonably necessary to ABS-CBN’s business, as it is, in fact, apparent that the same were merely imposed to prevent his acquisition of tenurial security.

The SC affirmed the findings of the CA characterizing Dela Rosa as a regular, and not a fixed-term, employee. As such, Dela Rosa’s employment may be terminated only for a just or authorized cause, as provided by law, and in accordance with the procedure for termination provided in the Labor Code.

In this case, the SC held that ABS-CBN had a just cause in terminating Dela Rosa’s employment as the latter committed serious misconduct against a female co-worker. Misconduct has been held to be an improper or wrong conduct; a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. To be considered a valid cause for dismissal within the meaning of the Labor Code, the misconduct must be of such a grave and aggravated character and not merely trivial or unimportant.

Based on the records, ABS-CBN was able to establish that while waiting for his shift, Dela Rosa reported for work and went to the editing bay while intoxicated. While there, he tried to hug and kiss a female co-worker, then placed his hands inside her pants and touched her buttocks. This incident was witnessed by several employees who stated that despite the resistance from and uneasiness of said co-worker, Dela Rosa persistently teased and harassed her, thereby negating Dela Rosa’s claim that the same was a mere accident.

Clearly, the foregoing acts constitute serious misconduct, as Dela Rosa did not only violate ABS-CBN’s Code of Conduct, particularly, its policy on Offenses Against Persons and Offenses Against Conduct and Decorum, but also adversely reflected on the ethics and morality in the company.

As ABS-CBN aptly pointed out, when he came to work intoxicated, Dela Rosa posed a serious threat to company property, considering that the editing bay contained expensive equipment which he could have damaged due to his intoxication. Further, his inebriated state at that time posed a serious peril to his co-employees, as in fact, was manifested when he repeatedly attempted to kiss a female co-worker and eventually, touched her buttocks.

However, despite the existence of a just cause, the Court finds that ABS-CBN failed to observe the proper procedure in terminating Dela Rosa’s employment. In this case, no valid second notice was given to Dela Rosa because while the memorandum dated informed him that he was sanctioned with the penalty of dismissal for his serious misconduct, the same was not effected considering the expiration of his purported fixed-term employment contract.

Consequently, for not having been furnished the second notice, which purpose is to inform the employee of his or her termination from employment, Dela Rosa’s right to procedural due process was violated.

Jurisprudence provides that in cases where the dismissals are for a just cause but are procedurally infirm, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for violation of his statutory rights. The rationale is that the employer should not be compelled to continue employing a person who is admittedly guilty of misfeasance or malfeasance and whose continued employment is patently inimical to the employer, as in this case.