THIRD DIVISION

G.R. No. 122917 July 12, 1999

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL,

RAQUEL ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON
GEORGE P. LIGUTAN JR., CELSO M. YAZAR, ALEX G. CORPUZ, RONALD M. DELFIN,
ROWENA M. TABAQUERO, CORAZON C. DELOS REYES, ROBERT G. NOORA, MILAGROS O.
LEQUIGAN, ADRIANA F. TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO, DORENDA
CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E. SALES, ISABEL
MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY V. GRUELA, BERNADETH D.
AGERO, CYNTHIA DE VERA, LANI R. CORTEZ, MA. ISABEL B. CONCEPCION, DINDO
VALERIO, ZENAIDA MATA, ARIEL DEL PILAR, MARGARET CECILIA CANOZA, THELMA
SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY
BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO and TIMOSA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST
COMPANY, respondents.

PANGANIBAN, J.:

The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the
same terms and conditions of employment as qualified able-bodied employees. Once they have
attained the status of regular workers, they should be accorded all the benefits granted by law,
notwithstanding written or verbal contracts to the contrary. This treatments is rooted not merely on
charity or accomodation, but on justice for all.

The Case

Challenged in the Petition for Certiorari 1 before us is the June 20, 1995 Decision 2 of the National Labor
Relations Commission (NLRC), 3 which affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L.
Linsangan. The labor arbiter's Decision disposed as follows: 4

WHEREFORE, judgment is hereby rendered dismissing the above-mentioned

complaint for lack of merit.

Also assailed is the August 4, 1995 Resolution 5 of the NLRC, which denied the Motion for
Reconsideration.

The Facts

The facts were summarized by the NLRC in this wise: 6

Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
"Employment Contract for Handicapped Workers". (pp. 68 & 69, Records) The full
text of said agreement is quoted below:

EMPLOYMENT CONTRACT FOR

HANDICAPPED WORKERS

This Contract, entered into by and between:

FAR EAST BANK AND TRUST COMPANY, a universal banking

corporation duly organized and existing under and by virtue of the
laws of the Philippines, with business address at FEBTC Building,
Muralla, Intramuros, Manila, represented herein by its Assistant Vice
President, MR. FLORENDO G. MARANAN, (hereinafter referred to
as the "BANK");

-and-

, years old, of legal age, , and

residing at (hereinafter referred to as the ("EMPLOYEE").

WITNESSETH : That

WHEREAS, the BANK, cognizant of its social responsibility, realizes

that there is a need to provide disabled and handicapped persons
gainful employment and opportunities to realize their potentials, uplift
their socio-economic well being and welfare and make them
productive, self-reliant and useful citizens to enable them to fully
integrate in the mainstream of society;

WHEREAS, there are certain positions in the BANK which may be

filled-up by disabled and handicapped persons, particularly deaf-
mutes, and the BANK ha[s] been approached by some civic-minded
citizens and authorized government agencies [regarding] the
possibility of hiring handicapped workers for these positions;

WHEREAS, the EMPLOYEE is one of those handicapped workers

who [were] recommended for possible employment with the BANK;

NOW, THEREFORE, for and in consideration of the foregoing

premises and in compliance with Article 80 of the Labor Code of the
Philippines as amended, the BANK and the EMPLOYEE have
entered into this Employment Contract as follows:

1. The BANK agrees to employ and train the EMPLOYEE, and the
EMPLOYEE agrees to diligently and faithfully work with the BANK,
as Money Sorter and Counter.

2. The EMPLOYEE shall perform among others, the following duties

and responsibilities:
 i. Sort out bills according to color;

ii. Count each denomination per

hundred, either manually or with the
aid of a counting machine;

iii. Wrap and label bills per hundred;

iv. Put the wrapped bills into bundles;

and

v. Submit bundled bills to the bank

teller for verification.

3. The EMPLOYEE shall undergo a training period of one (1) month,

after which the BANK shall determine whether or not he/she should
be allowed to finish the remaining term of this Contract.

4. The EMPLOYEE shall be entitled to an initial compensation of

P118.00 per day, subject to adjustment in the sole judgment of the
BANK, payable every 15th and end of the month. 1wphi1.nt

5. The regular work schedule of the EMPLOYEE shall be five (5)

days per week, from Mondays thru Fridays, at eight (8) hours a day.
The EMPLOYEE may be required to perform overtime work as
circumstance may warrant, for which overtime work he/she [shall] be
paid an additional compensation of 125% of his daily rate if
performed during ordinary days and 130% if performed during
Saturday or [a] rest day.

6. The EMPLOYEE shall likewise be entitled to the following benefits:

i. Proportionate 13th month pay based

on his basic daily wage.

ii. Five (5) days incentive leave.

iii. SSS premium payment.

7. The EMPLOYEE binds himself/herself to abide [by] and comply

with all the BANK Rules and Regulations and Policies, and to conduct
himself/herself in a manner expected of all employees of the BANK.

8. The EMPLOYEE acknowledges the fact that he/she had been

employed under a special employment program of the BANK, for
which reason the standard hiring requirements of the BANK were not
applied in his/her case. Consequently, the EMPLOYEE
acknowledges and accepts the fact that the terms and conditions of
the employment generally observed by the BANK with respect to the
BANK's regular employee are not applicable to the EMPLOYEE, and
that therefore, the terms and conditions of the EMPLOYEE's
 employment with the BANK shall be governed solely and exclusively
by this Contract and by the applicable rules and regulations that the
Department of Labor and Employment may issue in connection with
the employment of disabled and handicapped workers. More
specifically, the EMPLOYEE hereby acknowledges that the provisions
of Book Six of the Labor Code of the Philippines as amended,
particularly on regulation of employment and separation pay are not
applicable to him/her.

9. The Employment Contract shall be for a period of six (6) months or

from to unless earlier terminated by the BANK for any just
or reasonable cause. Any continuation or extension of this Contract
shall be in writing and therefore this Contract will automatically expire
at the end of its terms unless renewed in writing by the BANK.

IN WITNESS WHEREOF, the parties, have hereunto affixed their

signature[s] this day of , at Intramuros, Manila,
Philippines.

In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two
(2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one
(21). Their employment[s] were renewed every six months such that by the time this
case arose, there were fifty-six (56) deaf-mutes who were employed by respondent
under the said employment agreement. The last one was Thelma Malindoy who was
employed in 1992 and whose contract expired on July 1993.

xxx xxx xxx

Disclaiming that complainants were regular employees, respondent Far East Bank
and Trust Company maintained that complainants who are a special class of workers
the hearing impaired employees were hired temporarily under [a] special
employment arrangement which was a result of overtures made by some civic and
political personalities to the respondent Bank; that complainant[s] were hired due to
"pakiusap" which must be considered in the light of the context career and working
environment which is to maintain and strengthen a corps of professionals trained and
qualified officers and regular employees who are baccalaureate degree holders from
excellent schools which is an unbending policy in the hiring of regular employees;
that in addition to this, training continues so that the regular employee grows in the
corporate ladder; that the idea of hiring handicapped workers was acceptable to
them only on a special arrangement basis; that it was adopted the special program to
help tide over a group of workers such as deaf-mutes like the complainants who
could do manual work for the respondent Bank; that the task of counting and sorting
of bills which was being performed by tellers could be assigned to deaf-mutes that
the counting and sorting of money are tellering works which were always logically
and naturally part and parcel of the tellers' normal functions; that from the beginning
there have been no separate items in the respondent Bank plantilla for sortes or
counters; that the tellers themselves already did the sorting and counting chore as a
regular feature and integral part of their duties (p. 97, Records); that through the
"pakiusap" of Arturo Borjal, the tellers were relieved of this task of counting and
sorting bills in favor of deaf-mutes without creating new positions as there is no
position either in the respondent or in any other bank in the Philippines which deals
with purely counting and sorting of bills in banking operations.
Petitioners specified when each of them was hired and dimissed, viz: 7

NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed

1. MARITES BERNARDO Intramuros 12-Nov-90 17-Nov-93

2. ELVIRA GO DIAMANTE Intramuros 24-Jan-90 11-Jan-94

3. REBECCA E. DAVID Intramuros 16-Apr-90 23-Oct-93

4. DAVID P. PASCUAL Bel-Air 15-Oct-88 21-Nov-94

5. RAQUEL ESTILLER Intramuros 2-Jul-92 4-Jan-94

6. ALBERT HALLARE West 4-Jan-91 9-Jan-94

7. EDMUND M. CORTEZ Bel-Air 15-Jan-91 3-Dec-93

8. JOSELITO O. AGDON Intramuros 5-Nov-90 17-Nov-93

9. GEORGE P. LIGUTAN JR. Intramuros 6-Sep-89 19-Jan-94

10. CELSO M. YAZAR Intramuros 8-Feb-93 8-Aug-93

11. ALEX G. CORPUZ Intramuros 15-Feb-93 15-Aug-93

12. RONALD M. DELFIN Intramuros 22-Feb-93 22-Aug-93

13. ROWENA M. TABAQUERO Intramuros 22-Feb-93 22-Aug-93

14. CORAZON C. DELOS REYES Intramuros 8-Feb-93 8-Aug-93

15. ROBERT G. NOORA Intramuros 15-Feb-93 15-Aug-93

16. MILAGROS O. LEQUIGAN Intramuros 1-Feb-93 1-Aug-93

17. ADRIANA F. TATLONGHARI Intramuros 22-Jan-93 22-Jul-93

18. IKE CABUNDUCOS Intramuros 24-Feb-93 24-Aug-93

19. COCOY NOBELLO Intramuros 22-Feb-93 22-Aug-93

20. DORENDA CATIMBUHAN Intramuros 15-Feb-93 15-Aug-93

21. ROBERT MARCELO West 31 JUL 93 8 1-Aug-93

22. LILIBETH Q. MARMOLEJO West 15-Jun-90 21-Nov-93

23. JOSE E. SALES West 6-Aug-92 12-Oct-93

24. ISABEL MAMAUAG West 8-May-92 10-Nov-93

25. VIOLETA G. MONTES Intramuros 2-Feb-90 15-Jan-94

26. ALBINO TECSON Intramuros 7-Nov-91 10-Nov-93

27. MELODY B. GRUELA West 28-Oct-91 3-Nov-93

28. BERNADETH D. AGERO West 19-Dec-90 27-Dec-93

29. CYNTHIA DE VERA Bel-Air 26-Jun-90 3-Dec-93

30. LANI R. CORTEZ Bel-Air 15-Oct-88 10-Dec-93

31. MARIA ISABEL B.CONCEPCION West 6-Sep-90 6-Feb-94

32. DINDO VALERIO Intramuros 30-May-93 30-Nov-93

33. ZENAIDA MATA Intramuros 10-Feb-93 10-Aug-93

34. ARIEL DEL PILAR Intramuros 24-Feb-93 24-Aug-93

35. MARGARET CECILIA CANOZA Intramuros 27-Jul-90 4-Feb-94

36. THELMA SEBASTIAN Intramuros 12-Nov-90 17-Nov-93

37. MA. JEANETTE CERVANTES West 6-Jun-92 7-Dec-93

38. JEANNIE RAMIL Intramuros 23-Apr-90 12-Oct-93

39. ROZAIDA PASCUAL Bel-Air 20-Apr-89 29-Oct-93

40. PINKY BALOLOA West 3-Jun-91 2-Dec-93

41. ELIZABETH VENTURA West 12-Mar-90 FEB 94 [sic]

42. GRACE S. PARDO West 4-Apr-90 13-Mar-94

43. RICO TIMOSA Intramuros 28-Apr-93 28-Oct-93

As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein petitioners. Hence,
this recourse to this Court. 9

The Ruling of the NLRC

In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular
employees under Article 280 of the Labor Code, as amended, Respondent Commission ratiocinated
as follows:

We agree that Art. 280 is not controlling herein. We give due credence to the
conclusion that complainants were hired as an accommodation to [the]
recommendation of civic oriented personalities whose employment[s] were covered
by . . . Employment Contract[s] with special provisions on duration of contract as
specified under Art. 80. Hence, as correctly held by the Labor Arbiter a quo, the
terms of the contract shall be the law between the parties. 10

The NLRC also declared that the Magna Carta for Disabled Persons was not applicable,
"considering the prevailing circumstances/milieu of the case."

Issues

In their Memorandum, petitioners cite the following grounds in support of their cause:

I. The Honorable Commission committed grave abuse of discretion in holding that

the petitioners money sorters and counters working in a bank were not regular
employees.

II. The Honorable Commission committed grave abuse of discretion in holding that
the employment contracts signed and renewed by the petitioners which provide
for a period of six (6) months were valid.

III. The Honorable Commission committed grave abuse of discretion in not applying
the provisions of the Magna Carta for the Disabled (Republic Act No. 7277), on
proscription against discrimination against disabled persons. 11

In the main, the Court will resolve whether petitioners have become regular employees.

This Court's Ruling

The petition is meritorious. However, only the employees, who worked for more than six months and
whose contracts were renewed are deemed regular. Hence, their dismissal from employement was
illegal.

Preliminary Matter:

Propriety of Certiorari

Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the
NLRC is not allowed in a petition for certiorari. Specifically, it maintains that the Court cannot pass
upon the findings of public respondent that petitioners were not regular employees.
True, the Court, as a rule, does not review the factual findings of public respondents in
a certiorari proceeding. In resolving whether the petitioners have become regular employees, we
shall not change the facts found by the public respondent. Our task is merely to determine whether
the NLRC committed grave abuse of discretion in applying the law to the established facts, as
above-quoted from the assailed Decision.

Main Issue

Are Petitioners Regular Employee?

Petitioners maintain that they should be considered regular employees, because their task as money
sorters and counters was necessary and desirable to the business of respondent bank. They further
allege that their contracts served merely to preclude the application of Article 280 and to bar them
from becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as "special workers
and should not in any way be considered as part of the regular complement of the Bank." 12 Rather,
they were "special" workers under Article 80 of the Labor Code. Private respondent contends that it never
solicited the services of petitioners, whose employment was merely an "accommodation" in response to
the requests of government officials and civic-minded citizens. They were told from the start, "with the
assistance of government representatives," that they could not become regular employees because there
were no plantilla positions for "money sorters," whose task used to be performed by tellers. Their
contracts were renewed several times, not because of need "but merely for humanitarian reasons."
Respondent submits that "as of the present, the "special position" that was created for the petitioners no
longer exist[s] in private respondent [bank], after the latter had decided not to renew anymore their special
employment contracts."

At the outset, let it be known that this Court appreciates the nobility of private respondent's effort to
provide employment to physically impaired individuals and to make them more productive members
of society. However, we cannot allow it to elude the legal consequences of that effort, simply
because it now deems their employment irrelevant. The facts, viewed in light of the Labor Code and
the Magna Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of them,
should be deemed regular employees. As such, they have acquired legal rights that this Court is
duty-bound to protect and uphold, not as a matter of compassion but as a consequence of law and
justice.

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period
of one month, after which the employer shall determine whether or not they should be allowed to
finish the 6-month term of the contract. Furthermore, the employer may terminate the contract at any
time for a just and reasonable cause. Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term. 1wphi1.nt

According to private respondent, the employment contracts were prepared in accordance with Article
80 of the Labor code, which provides;

Art. 80. Employment agreement. Any employer who employs handicapped

workers shall enter into an employment agreement with them, which agreement shall
include:

(a) The names and addresses of the handicapped workers to be

employed;
 (b) The rate to be paid the handicapped workers which shall be not
less than seventy five (75%) per cent of the applicable legal minimum
wage;

(c) The duration of employment period; and

(d) The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor

or his duly authorized representatives.

The stipulations in the employment contracts indubitably conform with the aforecited provision.
Succeeding events and the enactment of RA No. 7277 (the Magna Carta for Disabled
Persons), 13 however, justify the application of Article 280 of the Labor Code.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and
renewed the contracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the
renewal of the contracts of the handicapped workers and the hiring of others lead to the conclusion
that their tasks were beneficial and necessary to the bank. More important, these facts show that
they were qualified to perform the responsibilities of their positions. In other words, their disability did
not render them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee
should be given the same terms and conditions of employment as a qualified able-bodied person.
Section 5 of the Magna Carta provides:

Sec. 5. Equal Opportunity for Employment. No disabled person shall be denied

access to opportunities for suitable employment. A qualified disabled employee shall
be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.

The fact that the employees were qualified disabled persons necessarily removes the employment
contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified
able-bodied persons, they are thus covered by Article 280 of the Labor Code, which provides:

Art. 280. Regular and Casual Employment. The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the
season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered as regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC, 14 in which this Court
held:

The primary standard, therefore, of determining regular employment is the

reasonable connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test is whether the former
is usually necessary or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work performed and
its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least one year, even if the performance
is not continuous and merely intermittent, the law deems repeated and continuing
need for its performance as sufficient evidence of the necessity if not indispensibility
of that activity to the business. Hence, the employment is considered regular, but
only with respect to such activity, and while such activity exist.

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business of
respondent bank. With the exception of sixteen of them, petitioners performed these tasks for more
than six months. Thus, the following twenty-seven petitioners should be deemed regular employees:
Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert
Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E.
Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero,
Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma
Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth
Ventura and Grace S. Pardo.

As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice
of making permanent casuals of our lowly employees by the simple expedient of extending to them
probationary appointments, ad infinitum." 15 The contract signed by petitioners is akin to a probationary
employment, during which the bank determined the employees' fitness for the job. When the bank
renewed the contract after the lapse of the six-month probationary period, the employees thereby became
regular employees. 16 No employer is allowed to determine indefinitely the fitness of its employees.

As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their
services may be terminated only for a just or authorized cause. Because respondent failed to show
such cause, 17 these twenty-seven petitioners are deemed illegally dismissed and therefore entitled to
back wages and reinstatement without loss of seniority rights and other privileges. 18 Considering the
allegation of respondent that the job of money sorting is no longer available because it has been assigned
back to the tellers to whom it originally belonged, 18 petitioners are hereby awarded separation pay in lieu
of reinstatement. 20

Because the other sixteen worked only for six months, they are not deemed regular employees and
hence not entitled to the same benefits.

Applicability of the

Brent Ruling

Respondent bank, citing Brent School v. Zamora 21 in which the Court upheld the validity of an
employment contract with a fixed term, argues that the parties entered into the contract on equal footing.
It adds that the petitioners had in fact an advantage, because they were backed by then DSWD Secretary
Mita Pardo de Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that the petitioners
were disabled, and that the bank had to determine their fitness for the position. Indeed, its validity is
based on Article 80 of the Labor Code. But as noted earlier, petitioners proved themselves to
be qualified disabled persons who, under the Magna Carta for Disabled Persons, are entitled to
terms and conditions of employment enjoyed by qualified able-bodied individuals; hence, Article 80
does not apply because petitioners are qualified for their positions. The validation of the limit
imposed on their contracts, imposed by reason of their disability, was a glaring instance of the very
mischief sought to be addressed by the new law.

Moreover, it must be emphasized that a contract of employment is impressed with public

interest. 22 Provisions of applicable statutes are deemed written into the contract, and the "parties are not
at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by
simply contracting with each other." 23 Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled Persons, which mandate
that petitioners must be treated as qualified able-bodied employees.

Respondent's reason for terminating the employment of petitioners is instructive. Because the
Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be turned over to the BSP during
business hours from 8:00 a.m. to 5:00 p.m., respondent resorted to nighttime sorting and counting of
money. Thus, it reasons that this task "could not be done by deaf mutes because of their physical
limitations as it is very risky for them to travel at night." 24 We find no basis for this argument. Travelling
at night involves risks to handicapped and able-bodied persons alike. This excuse cannot justify the
termination of their employment.

Other Grounds Cited by Respondent

Respondent argues that petitioners were merely "accommodated" employees. This fact does not
change the nature of their employment. As earlier noted, an employee is regular because of the
nature of work and the length of service, not because of the mode or even the reason for hiring
them.

Equally unavailing are private respondent's arguments that it did not go out of its way to recruit
petitioners, and that its plantilla did not contain their positions. In L. T. Datu v. NLRC, 25 the Court held
that "the determination of whether employment is casual or regular does not depend on the will or word of
the employer, and the procedure of hiring . . . but on the nature of the activities performed by the
employee, and to some extent, the length of performance and its continued existence."

Private respondent argues that the petitioners were informed from the start that they could not
become regular employees. In fact, the bank adds, they agreed with the stipulation in the contract
regarding this point. Still, we are not persuaded. The well-settled rule is that the character of
employment is determined not by stipulations in the contract, but by the nature of the work
performed. 26 Otherwise, no employee can become regular by the simple expedient of incorporating this
condition in the contract of employment.

In this light, we iterate our ruling in Romares v. NLRC: 27

Art. 280 was emplaced in our statute books to prevent the circumvention of the
employee's right to be secure in his tenure by indiscriminately and completely ruling
out all written and oral agreements inconsistent with the concept of regular
employment defined therein. Where an employee has been engaged to perform
activities which are usually necessary or desirable in the usual business of the
 employer, such employee is deemed a regular employee and is entitled to security of
tenure notwithstanding the contrary provisions of his contract of employment.

xxx xxx xxx

At this juncture, the leading case of Brent School, Inc. v. Zamora proves instructive.
As reaffirmed in subsequent cases, this Court has upheld the legality of fixed-term
employment. It ruled that the decisive determinant in "term employment" should not
be the activities that the employee is called upon to perform but the day certain
agreed upon the parties for the commencement and termination of their employment
relationship. But this Court went on to say that where from the circumstances it is
apparent that the periods have been imposed to preclude acquisition of tenurial
security by the employee, they should be struck down or disregarded as contrary to
public policy and morals.

In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the
working class, but also the concern of the State for the plight of the disabled. The noble objectives of
Magna Carta for Disabled Persons are not based merely on charity or accommodation, but on
justice and the equal treatment of qualified persons, disabled or not. In the present case, the
handicap of petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of this
statement is the repeated renewal of their employment contracts. Why then should they be
dismissed, simply because they are physically impaired? The Court believes, that, after showing
their fitness for the work assigned to them, they should be treated and granted the same rights like
any other regular employees.

In this light, we note the Office of the Solicitor General's prayer joining the petitioners' cause. 28

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995 Decision
and the August 4, 1995 Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far
East Bank and Trust Company is hereby ORDERED to pay back wages and separation pay to each
of the following twenty-seven (27) petitioners, namely, Marites Bernardo, Elvira Go Diamante,
Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O.
Agdon, George P. Ligutan Jr., Liliberh Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G.
Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma.
Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC
is hereby directed to compute the exact amount due each of said employees, pursuant to existing
laws and regulations, within fifteen days from the finality of this Decision. No costs. 1wphi1.nt

SO ORDERED.

Romero, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.

 SECOND DIVISION

G.R. No. 100641 June 14, 1993

FARLE P. ALMODIEL, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), RAYTHEON PHILS.,
INC., respondents.

Apolinario Lomabao, Jr. for petitioner.

Vicente A. Cruz, Jr., for private respondent.

NOCON, J.:

Subject of this petition for certiorari is the decision dated March 21, 1991 of the National Labor
Relations Commission in NLRC Case No.
00-00645-89 which reversed and set aside the Labor Arbiter's decision dated September 27, 1989
and ordered instead the payment of separation pay and financial assistance of P100,000.00.
Petitioner imputes grave abuse of discretion on the part of the Commission and prays for the
reinstatement of the Labor Arbiter's decision which declared his termination on the ground of
redundancy illegal.

Petitioner Farle P. Almodiel is a certified public accountant who was hired in October, 1987 as Cost
Accounting Manager of respondent Raytheon Philippines, Inc. through a reputable placement firm,
John Clements Consultants, Inc. with a starting monthly salary of P18,000.00. Before said
employment, he was the accounts executive of Integrated Microelectronics, Inc. for several years.
He left his lucrative job therein in view of the promising career offered by Raytheon. He started as a
probationary or temporary employee. As Cost Accounting Manager, his major duties were: (1) plan,
coordinate and carry out year and physical inventory; (2) formulate and issue out hard copies of
Standard Product costing and other cost/pricing analysis if needed and required and (3) set up the
written Cost Accounting System for the whole company. After a few months, he was given a
regularization increase of P1,600.00 a month. Not long thereafter, his salary was increased to
P21,600.00 a month.

On August 17, 1988, he recommended and submitted a Cost Accounting/Finance Reorganization,

affecting the whole finance group but the same was disapproved by the Controller. However, he was
assured by the Controller that should his position or department which was apparently a one-man
department with no staff becomes untenable or unable to deliver the needed service due to
manpower constraint, he would be given a three (3) year advance notice.
In the meantime, the standard cost accounting system was installed and used at the Raytheon
plants and subsidiaries worldwide. It was likewise adopted and installed in the Philippine operations.
As a consequence, the services of a Cost Accounting Manager allegedly entailed only the
submission of periodic reports that would use computerized forms prescribed and designed by the
international head office of the Raytheon Company in California, USA.

On January 27, 1989, petitioner was summoned by his immediate boss and in the presence of IRD
Manager, Mr. Rolando Estrada, he was told of the abolition of his position on the ground of
redundancy. He pleaded with management to defer its action or transfer him to another department,
but he was told that the decision of management was final and that the same has been conveyed to
the Department of Labor and Employment. Thus, he was constrained to file the complaint for illegal
dismissal before the Arbitration Branch of the National Capital Region, NLRC, Department of Labor
and Employment.

On September 27, 1989, Labor Arbiter Daisy Cauton-Barcelona rendered a decision, the dispositive
portion of which reads as follows:

WHEREFORE, judgment is hereby rendered declaring that complainant's termination

on the ground of redundancy is highly irregular and without legal and factual basis,
thus ordering the respondents to reinstate complainant to his former position with full
backwages without lost of seniority rights and other benefits. Respondents are
further ordered to pay complainant P200,000.00 as moral damages and P20,000.00
as exemplary damages, plus ten percent (10%) of the total award as attorney's fees. 1

Raytheon appealed therefrom on the grounds that the Labor Arbiter committed grave abuse of
discretion in denying its rights to dismiss petitioner on the ground of redundancy, in relying on
baseless surmises and self-serving assertions of the petitioner that its act was tainted with malice
and bad faith and in awarding moral and exemplary damages and attorney's fees.

On March 21, 1991, the NLRC reversed the decision and directed Raytheon to pay petitioner the
total sum of P100,000.00 as separation pay/financial assistance. The dispositive portion of which is
hereby quoted as follows:

WHEREFORE, the appealed decision is hereby set aside. In its stead, Order is
hereby issued directing respondent to pay complainant the total separation
pay/financial assistance of One Hundred Thousand Pesos (P100,000.00).

SO ORDERED. 2

From this decision, petitioner filed the instant petition averring that:

The public respondent committed grave abuse of discretion amounting to (lack of) or
in excess of jurisdiction in declaring as valid and justified the termination of petitioner
on the ground of redundancy in the face of clearly established finding that petitioner's
termination was tainted with malice, bad faith and irregularity. 3
Termination of an employee's services because of redundancy is governed by Article 283 of the
Labor Code which provides as follows:

Art. 283. Closure of establishment and reduction of personnel. The employer may
also terminate the employment of any employee due to installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the worker
and the Department of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to installation of labor-saving
devices or redundancy, the worker affected thereby shall be entitled to a separation
pay equivalent to at least one (1) month pay for every year of service, whichever is
higher. In case of retrenchment to prevent losses and in cases of closure or
cessation of operations of establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be equivalent to at least one (1)
month pay or at least one-half (1/2) month pay for every year of service, whichever is
higher. A fraction of at least six (6) months shall be considered as one (1) whole year.

There is no dispute that petitioner was duly advised, one (1) month before, of the termination of his
employment on the ground of redundancy in a written notice by his immediate superior, Mrs.
Magdalena B.D. Lopez sometime in the afternoon of January 27, 1989. He was issued a check for
P54,863.00 representing separation pay but in view of his refusal to acknowledge the notice and the
check, they were sent to him thru registered mail on January 30, 1989. The Department of Labor
and Employment was served a copy of the notice of termination of petitioner in accordance with the
pertinent provisions of the Labor Code and the implementing rules.

The crux of the controversy lies on whether bad faith, malice and irregularity crept in the abolition of
petitioner's position of Cost Accounting Manager on the ground of redundancy. Petitioner claims that
the functions of his position were absorbed by the Payroll/Mis/Finance Department under the
management of Danny Ang Tan Chai, a resident alien without any working permit from the
Department of Labor and Employment as required by law. Petitioner relies on the testimony of
Raytheon's witness to the effect that corollary functions appertaining to cost accounting were
dispersed to other units in the Finance Department. And granting that his department has to be
declared redundant, he claims that he should have been the Manager of the Payroll/Mis/Finance
Department which handled general accounting, payroll and encoding. As a B. S. Accounting
graduate, a CPA with M.B.A. units, 21 years of work experience, and a natural born Filipino, he
claims that he is better qualified than Ang Tan Chai, a B.S. Industrial Engineer, hired merely as a
Systems Analyst Programmer or its equivalent in early 1987, promoted as MIS Manager only during
the middle part of 1988 and a resident alien.

On the other hand, Raytheon insists that petitioner's functions as Cost Accounting Manager had not
been absorbed by Ang Tan Chai, a permanent resident born in this country. It claims to have
established below that Ang Tan Chai did not displace petitioner or absorb his functions and duties as
they were occupying entirely different and distinct positions requiring different sets of expertise or
qualifications and discharging functions altogether different and foreign from that of petitioner's
abolished position. Raytheon debunks petitioner's reliance on the testimony of Mr. Estrada saying
that the same witness testified under oath that the functions of the Cost Accounting Manager had
been completely dispensed with and the position itself had been totally abolished.

Whether petitioner's functions as Cost Accounting Manager have been dispensed with or merely
absorbed by another is however immaterial. Thus, notwithstanding the dearth of evidence on the
said question, a resolution of this case can be arrived at without delving into this matter. For even
conceding that the functions of petitioner's position were merely transferred, no malice or bad faith
can be imputed from said act. A survey of existing case law will disclose that in Wiltshire File Co.,
Inc. v. NLRC, 4 the position of Sales Manager was abolished on the ground of redundancy as the duties
previously discharged by the Sales Manager simply added to the duties of the General Manager to whom
the Sales Manager used to report. In adjudging said termination as legal, this Court said that redundancy,
for purposes of our Labor Code, exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise. The characterization of an
employee's services as no longer necessary or sustainable, and therefore, properly terminable, was an
exercise of business judgment on the part of the employer. The wisdom or soundness of such
characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of
the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown.

In the case of International Macleod, Inc. v. Intermediate Appellate Court, 5 this Court also considered
the position of Government Relations Officer to have become redundant in view of the appointment of the
International Heavy Equipment Corporation as the company's dealer with the government. It held therein
that the determination of the need for the phasing out of a department as a labor and cost saving device
because it was no longer economical to retain said services is a management prerogative and the courts
will not interfere with the exercise thereof as long as no abuse of discretion or merely arbitrary or
malicious action on the part of management is shown.

In the same vein, this Court ruled in Bondoc v. People's Bank and Trust Co., 6 that the bank's board of
directors possessed the power to remove a department manager whose position depended on the
retention of the trust and confidence of management and whether there was need for his services.
Although some vindictive motivation might have impelled the abolition of his position, this Court
expounded that it is undeniable that the bank's board of directors possessed the power to remove him
and to determine whether the interest of the bank justified the existence of his department.

Indeed, an employer has no legal obligation to keep more employees than are necessary for the
operation of its business. Petitioner does not dispute the fact that a cost accounting system was
installed and used at Raytheon subsidiaries and plants worldwide; and that the functions of his
position involve the submission of periodic reports utilizing computerized forms designed and
prescribed by the head office with the installation of said accounting system. Petitioner attempts to
controvert these realities by alleging that some of the functions of his position were still
indispensable and were actually dispersed to another department. What these indispensable
functions that were dispersed, he failed however, to specify and point out. Besides, the fact that the
functions of a position were simply added to the duties of another does not affect the legitimacy of
the employer's right to abolish a position when done in the normal exercise of its prerogative to
adopt sound business practices in the management of its affairs.

Considering further that petitioner herein held a position which was definitely managerial in
character, Raytheon had a broad latitude of discretion in abolishing his position. An employer has a
much wider discretion in terminating employment relationship of managerial personnel compared to
rank and file employees. 7 The reason obviously is that officers in such key positions perform not only
functions which by nature require the employer's full trust and confidence but also functions that spell the
success or failure of an enterprise.

Likewise destitute of merit is petitioner's imputation of unlawful discrimination when Raytheon

caused corollary functions appertaining to cost accounting to be absorbed by Danny Ang Tan Chai, a
resident alien without a working permit. Article 40 of the Labor Code which requires employment
permit refers to non-resident aliens. The employment permit is required for entry into the country for
employment purposes and is issued after determination of the non-availability of a person in the
Philippines who is competent, able and willing at the time of application to perform the services for
which the alien is desired. Since Ang Tan Chai is a resident alien, he does not fall within the ambit of
the provision.

Petitioner also assails Raytheon's choice of Ang Tan Chai to head the Payroll/Mis/Finance
Department, claiming that he is better qualified for the position. It should be noted, however, that Ang
Tan Chai was promoted to the position during the middle part of 1988 or before the abolition of
petitioner's position in early 1989. Besides the fact that Ang Tan Chai's promotion thereto is a settled
matter, it has been consistently held that an objection founded on the ground that one has better
credentials over the appointee is frowned upon so long as the latter possesses the minimum
qualifications for the position. In the case at bar, since petitioner does not allege that Ang Tan Chai
does not qualify for the position, the Court cannot substitute its discretion and judgment for that
which is clearly and exclusively management prerogative. To do so would take away from the
employer what rightly belongs to him as aptly explained in National Federation of Labor Unions v.
NLRC: 8

It is a well-settled rule that labor laws do not authorize interference with the
employer's judgment in the conduct of his business. The determination of the
qualification and fitness of workers for hiring and firing, promotion or reassignment
are exclusive prerogatives of management. The Labor Code and its implementing
Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor
in the courts) managerial authority. The employer is free to determine, using his own
discretion and business judgment, all elements of employment, "from hiring to firing"
except in cases of unlawful discrimination or those which may be provided by law.
There is none in the instant case.

Finding no grave abuse of discretion on the part of the National Labor Relations Commission in
reversing and annulling the decision of the Labor Arbiter and that on the contrary, the termination of
petitioner's employment was anchored on a valid and authorized cause under Article 283 of the
Labor Code, the instant petition for certiorari must fail.

SO ORDERED.

Narvasa, C.J., Padilla and Regalado, JJ., concur.