Servidad v.

NLRC
1998 March 18, GR No 128682
Facts: Servidad was employed on 9 May 1994 by respondent INNODATA as Data Control
Clerk, under a contract of employment. Section 2 of such contract states: This Contract
shall be effective for a period of one (1) year commencing on 10 May1994 until 10 May 1995
unless sooner terminated pursuant to the provisions hereof.
Petitioner was a contractual employee for six months or from the period of May 10, 1994 to
November 10, 1994 during which, the employer can terminate with due notice. The contract
also states that should the employee continue his employment beyond the 6-month period,
he shall become a regular employee upon demonstration of sufficient skill. On November 9,
1995 or one day before his contractual terms ends, he was made to sign a three-month
probationary employment and later, an extended three-month employment good until 9 May
1995.Petitioner was terminated on May 9, 1995 and filed an illegal dismissal complaint
before the Labor Arbiter.
The Labor Arbiter found the respondent INNODATA guilty of the charge and was ordered to
pay backwages and reinstatement of petitioner. On appeal thereto by INNODATA, the NLRC
reversed the decision declaring that the contract between petitioner and private
complainant was for a fixed term and the dismissal, at the end of one year, was valid.
Issue: WON the contract entered into by the petitioner and respondent is valid and
enforceable.
Held: NO.
The NLRC found that the contract in question is for a fixed term. The said contract provides
for two periods. The first period was for six months terminable at the option of private
respondent, while the second period was also for six months but probationary in character.
In both cases, the private respondent did not specify the criteria for the termination or
retention of the services of petitioner. It is violative of the right of the employee against
unwarranted dismissal. By the provisions of the very contract itself, petitioner has become a
regular employee of private respondent.
As to the private respondent statement that the one-year period stipulated in subject
contract was to enable petitioner to acquire the skill necessary for the job. In effect, what
respondent employer theorized upon is that the one-year term of employment is
probationary. If the nature of the job did actually necessitate at least one year for the
employee to acquire the requisite training and experience, the same could not be a valid
probationary employment as it falls short of the requirement of Article 281[10] of the Labor
Code. It was not brought to light that the petitioner was duly informed at the start of his
employment, of the reasonable standards under which he could qualify as a regular
employee.
WHEREFORE, the petition is GRANTED, the questioned decision of NLRC is SET ASIDE, and
the decision of the Labor Arbiter, dated August 20, 1996, in NLRC-NCR-00-055-03471-95
REINSTATED, with the modification that the award of backwages be computed from the time
of the dismissal of petitioner to his actual or payroll reinstatement. Costs against the private
respondent.

Caparoso vs CA
Facts:
Composite is a supplier of confectioneries Caparoso and Quindipan were Composites
deliverymen. Petitioners were dismissed from the service and subsequently filed illegal
dismissal complaint. Respondents alleged that petitioners were both hired as deliverymen,
initially for three months and then on a month-to-month basis and the termination from
employment resulted from the expiration of their contracts of employment on 8 October
1999. Labor Arbiter - petitioners are regular employees of respondents NLRC- Reversed LA
decision CA- affirmed the NLRCs decision. The Court of Appeals held that respondents
manpower requirement varies from month to month depending on the demand from their
clients for their products. Respondents manpower requirement determines the period of
their employees services. Respondents employed petitioners for the purpose of addressing
a temporary manpower shortage.
Issues :
1. Whether petitioners are regular employees of respondents
2. Whether respondents are guilty of illegal dismissal.
Held:
Petitioners are Not Regular Employees Under Article 280 of the Labor Code, a regular
employee is (1) one who is engaged to perform activities that are necessary or desirable in
the usual trade or business of the employer, or (2) a casual employee who has rendered at
least one year of service, whether continuous or broken, with respect to the activity in which
he is employed. However, even if an employee is engaged to perform activities that are
necessary or desirable in the usual trade or business of the employer, it does not preclude
the fixing of employment for a definite period.
We agree with the Court of Appeals that in this case, the fixed period of employment was
knowingly and voluntarily agreed upon by the parties. The Court of Appeals noted that there
was no indication of force, duress, or improper pressure exerted on petitioners when they
signed the contracts. Further, there was no proof that respondents were regularly engaged
in hiring workers for work for a minimum period of five months to prevent the regularization
of their employees. Petitioners Employment is akin to Probationary Employment At most,
petitioners employment for less than six months can be considered probationary.
Article 281 of the Labor Code provides: Art. 281. Probationary Employment. - Probationary
employment shall not exceed six (6) months from the date the employee started working,
unless it is covered by an apprenticeship agreement stipulating a longer period. The services
of an employee who has been engaged on a probationary basis may be terminated for a just
cause or when he fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of his engagement.
An employee who is allowed to work after a probationary period shall be considered a
regular employee. Petitioners were hired on 11 May 1999, initially for three months. After the
expiration of their contracts, petitioners were hired on a month-to-month basis. Their
contracts of employment ended on 8 October 1999. Hence, they were employed for a total
of five months. Their employment did not even exceed six months to entitle them to become
regular employees. . Petitioners were not Illegally Dismissed from Employment Petitioners
terms of employment are governed by their fixed-term contracts. Petitioners fixed-term
employment contracts had expired. They were not illegally dismissed from employment.