Republic of the Philippines



G.R. No. 112535 June 22, 1998


G.R. No. 113758 June 22, 1998



Petitioner is a corporation duly organized and existing under the laws of the Republic of the Philippines with its principal office at 825 Epifanio de los Santos Avenue, Quezon City. 1 Private respondents in G.R. Nos. 11235 and 113758 are employed by petitioner as "regular contractuals," 2 performing work as salesladies, wrappers, stockmen, pressers, as required by the regular business of petitioner. 3 The two petitions are herein consolidated. They are seasonal employees who are hired by petitioner at the start of the peak season of the year, which normally runs from September until January. As soon as the demand for their services ends, their employment is terminated. The temporary hiring of additional employees within the five-month peak season was practiced by petitioner until the 1988 CBA negotiations, in which the Union proposed that the employees who are hired during the peak season be allowed to stay. 4 Negotiations between petitioner and its employees resulted in the retention of season employees as "regular contractuals," 5 who would enjoy all the benefits of regular employees, including security to tenure, minimum wage, overtime pay and all benefits provided for in the Code for a regular employee. 6 Accordingly, as soon as a "regular contractual" is promoted or "regularized" to a position in a newly-opened branch of petitioner, said employee is authomatically included in the bargaining unit represented by the union, 7 and is entitled to the benefits of the CBA thereafter. 8 Pursuant to this arrangement, until a regular contractual is "regularized," he, although regarded as a regular employee, is excluded from the bargaining unit. Not satisfied with their exclusion from the bargaining unit, and the concomitant deprivation of the benefits granted to members thereof, petitioners continually demanded their inclusion in the bargaining unit, which repeatedly denied. Hence, they filed a complaint with the National Labor Relations Commission (NLRC for brevity) praying, among others, that they be granted all benefits granted to regular employees in the Collective Bargaining Agreement (CBA) from the time they are regularized.

The parties filed their respective position paper, 9 with the petitioner acknowledging that the complainants were already regular employees. 10 The Labor Arbiter declared complainants as regular rank-and-file employees, with the additional right to membership in the bargaining unit defined under the CBA, ordering respondent to pay all benefits thereunder accorded to regular employees, with back benefits. 11 On appeal to the National Labor Relations Commission (NLRC), 12 the questioned decision was affirmed. In a Resolution dated December 14, 1993, 13 the NLRC ruled that private respondents are regular employees of petitioner and, thus, are entitled to all the benefits granted under the CBA. Petitioner's Motion for Reconsideration 14 was denied in a subsequent Resolution dated February 7, 1994. Hence, this petition seeking to annul and set aside both Resolutions.

Petitioner corollarily contests the inclusion of private respondents as regular contractual employees within the scope of the bargaining unit, thus entitling them to benefuts under the CBA. Althought it admits that once private respondents become regular employees, they shall be entitled to the benefits provided under the CBA, it contends that they are not entitled to the "regularization differential" covering the period from the time they rendered one year of service until their promotion or regularization because they were still "seasonal employees."

The issue which arises in this case is whether public respondent NLRC committed grave abuse of discretion in issuing said Resolutions.

We hold in the negative.

Petitioner has engaged in a semantic interplay of words in distorting the definition of a "regular employee" as provided by the Labor Code. Under Article 280 of the Labor Code:

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 a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

It is undeniable that private respondents have rendered at least one year of service to petitioner as sales clerks, an activity which is usually necessary or desirable in the usual business or trade of the employer. Therefore, they are regular employees under the CBA who are entitled to the benefits granted to all other regular employees of petitioner under the CBA. As held by public respondent:

. . . (t)o be sure, "an employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed, and his employment shall continue while such actually exists." (Article 280, Labor Code, as amended). On the basis of this express mandate and as established by the evidence on record, the posture of the appellant that there is another classification of "regular contractuals" in the CBA cannot prevail over the provision of law as well pointed out by the appellees in their opposition to the appeal. 15

Petitioner further assails the jurisdiction of public respondent 16 by alleging that the instant case involves "the interpretation or implementation of collective bargaining agreements," the resolution of which is within the exclusive jurisdiction of Voluntary Arbitration. It apparently relies on Articles 217(c) of the Labor Code which states,

Art. 217(c). Cases arising from the interpretation or implementation of collective bargaining agreement and those arising form the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreement.

The aforestated provision of law is inapplicable to the case at bar which, as petitioner failed consider, originated from a claim for benefits filed by private respondents and not an interpretation of a provision found in the collective bargaining agreement. Simply put, it does not involve the interpretation or implementation of the collective bargaining agreement as, in granting the relief sought by the parties, we are constrained to examine the basis of private respondents' claim and not the contents of the CBA.

Regarding the issue of jurisdiction, the applicable provision is Article 217(a)(6) of the Labor Code, to wit:

Art. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:

(1) . . .

(2) . . .

(3) . . .

(4) . . .

(5) . . .

(6) Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (emphasis supplied)

Clearly, the Labor Arbiter had jurisdiction over the instant case, since the claims of private respondents arose out of employer-employee relations and involve amounts exceeding five thousand pesos (P5,000.00). As public respondent correctly ruled,

A close examination of the record . . . shows that in their basic complaint filed on March 27, 1992, the complainants sought full backwages and other benefits from the time they were dismissed to their actual reinstatement, back differentials in benefits as regular employees from the date they rendered one year service until their regularization, and moral damages. All these money claims, as expressly provided by law or appropriate agreement, are within the original and exclusive jurisdiction of Labor Arbiters pursuant to Article 217 of the Labor Code, as amended by B.P. Blg. 130 and B.P. Blg. 227. Jurisdiction is conferred by law, and once the Labor Arbiter acquires jurisdiction over labor dispute, it continues to be exercised until the case has been finally decided on its merits as what transpired in the present proceeding. 17

As constantly reiterated in cases involving money claims of employees, 18 where the claim of an employee of a corporation is over and above the amount of five thousand pesos (P5,000.00), the power to adjudicate such claim belongs to the Labor Arbiter, who has the exclusive jurisdiction over employees' claims, where the amount of the claim exceed five thousand pesos (P5,000.00). 19 Here, the claim of each of the private respondents is well beyond the five thousand peso (P5,000.00) requirement, thus placing the money claim of private respondents under the jurisdiction of the Labor Arbiter. A computation of the claims and differentials to which they are entitled is summarized as follows:

Julio B. Daet P31,881.33 20

Emma R. Agustin P31,901.88 21

Joselito A. Arambulo P32,861.94 22

Evangeline B. Casas P32,409.13 23

Gina Ciriaco P31,972.48 24

Marieta R. Daet P32,220.14 25

Elizabeth L. Deligos P12,440.06 26

Alice C. Figura P32,764.58 27

Grethel F. Gracia P32,478.43 28

Ligaya A. Hidalgo P32,639.09 29

Ellen I. Iledan P31,850.27 30

Felina C. Pagtalunan P22,520.92 31

Rosemarie Tonio P23,226.99 32

Emmanuel C. Lumbera P21,735.06 33

Cora Villa P23,038.39 34

WHEREFORE, considering the foregoing, neither of the questioned Resolutions assailed by petitioner may be struck down for having been issued with grave abuse of discretion. This petition is DISMISSED for lack of merit. No cost.


Narvasa, C.J., Kapunan and Purisima, JJ., concur.


1 G.R. No. 112535, Rollo, p. 4.

2 Ibid., p. 4b.

3 Annex "D".

4 Ibid., p. 6.

5 Respondent's Position Paper, dated April 24, 1992, p. 2.

6 Ibid.

7 CBA, Article II (4), Annex "P".

8 Petition, dated February 16, 1994, p. 6.

9 Complainant's Position Paper filed on March 5, 1992, Supplemental Position Paper filed on April 23, 1992; Respondent's Position Paper filed on April 24, 1992.

10 Ibid., p. 3.

11 NLRC Decision penned by Labor Arbiter Arthur L. Amansec, dated October 29, 1992.

12 Dated December 15, 1992.

13 The dispositive portion of which reads as follows: "There can be no dispute that the complainants are regular workers. They served as Sales Clerks whose duties and functions are usually necessary or desirable in the usual business of respondent corporation, which maintains stores engaged in the sale of dresses. On top of this, they have all rendered more than one (1) years of service (emphasis supplied) with the respondent corporation. As such, they are entitled to all the benefits extended under the CBA to all other regular employees. Of course, we are aware of the agreement in the CBA that regular contractual employees of which the complainants were at that time, will become entitled to the benefits provided in the CBA, only upon promotion or regularization, meaning, when assigned to a newly-opened store or to a vacated regular position. The respondents invoked the application of this agreement to disqualify the complainants from the regularization differential covering the period from their one year of service until their promotion or regularization. Such argument of respondents is without merit. The agreement cited is contrary to law (emphasis supplied), particularly Article 280 of the Labor Code, as amended, which emphasized the voiding of stipulations exempting from legal regularization. Besides, their disqualification from the enjoyment of the CBA-granted benefit would be discriminatory, because they are not any different from those who enjoy them. And, barring them from union participation violates their right to sell-organization and equal work opportunities. . . ."

14 Dated June 10, 1993.

15 NLRC Resolution, dated December 14, 1993, pp. 6-7.

16 Petition, p. 11.

17 NLRC Resolution, dated December 14, 1993, p. 5.

18 To wit, Brokenshire Memorial Hospital, Inc. v. Minister of Labor (1990), Aboitiz Shipping Corp. v. De La Serna (1990) and Sevando's Inc. v. Secretary of Labor (1990).

19 Ibid.

20 Annex "A".

21 Annex "A-1".

22 Annex "A-2".

23 Annex "A-3".

24 Annex "A-4".

25 Annex "A-5".

26 Annex "A-6".

27 Annex "A-7".

28 Annex "A-8".

29 Annex "A-9".

30 Annex "A-10".

31 Annex "A-11".

32 Annex "A-12".

33 Annex "A-13".

34 Annex "A-14".

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