G.R. No. 122653 December 12, 1997 DAVIDE, JR., J.

: Its motion for reconsideration having been denied, 5 the petitioner

came to this Court contending that respondent NLRC committed
grave abuse of discretion amounting to lack of jurisdiction in
PURE FOODS CORPORATION, petitioner, 
reversing the decision of the Labor Arbiter.
vs.
NATIONAL LABOR RELATIONS COMMISSION, RODOLFO
The petitioner submits that the private respondents are now
CORDOVA, VIOLETA CRUSIS, ET AL., *respondents.
estopped from questioning their separation from petitioner's employ
in view of their express conformity with the five-month duration of
The crux of this petition for certiorari is the issue of whether their employment contracts. Besides, they fell within the exception
employees hired for a definite period and whose services are provided in Article 280 of the Labor Code which reads: "[E]xcept
necessary and desirable in the usual business or trade of the where the employment has been fixed for a specific project or
employer are regular employees. undertaking the completion or termination of which has been
determined at the time of the engagement of the employee."
Moreover, the first paragraph of the said article must be read and
The private respondents (numbering 906) were hired by petitioner interpreted in conjunction with the proviso in the second paragraph,
Pure Foods Corporation to work for a fixed period of five months at which reads: "Provided that any employee who has rendered at
its tuna cannery plant in Tambler, General Santos City. After the least one year of service, whether such service is continuous or
expiration of their respective contracts of employment in June and broken, shall be considered a regular employee with respect to the
July 1991, their services were terminated. They forthwith executed activity in which he is employed . . ." In the instant case, the private
a "Release and Quitclaim" stating that they had no claim respondents were employed for a period of five months only. In any
whatsoever against the petitioner. event, private respondents' prayer for reinstatement is well within
the purview of the "Release and Quitclaim" they had executed
On 29 July 1991, the private respondents filed before the National wherein they unconditionally released the petitioner from any and all
Labor Relations Commission (NLRC) Sub-Regional Arbitration other claims which might have arisen from their past employment
Branch No. XI, General Santos City, a complaint for illegal dismissal with the petitioner.
against the petitioner and its plant manager, Marciano
Aganon. 1 This case was docketed as RAB-11-08-50284-91. In its Comment, the Office of the Solicitor General (OSG) advances
the argument that the private respondents were regular employees,
since they performed activities necessary and desirable in the
On 23 December 1992, Labor Arbiter Arturo P. Aponesto handed business or trade of the petitioner. The period of employment
down a decision 2 dismissing the complaint on the ground that the stipulated in the contracts of employment was null and void for
private respondents were mere contractual workers, and not regular being contrary to law and public policy, as its purpose was to
employees; hence, they could not avail of the law on security of circumvent the law on security of tenure. The expiration of the
tenure. The termination of their services by reason of the expiration contract did not, therefore, justify the termination of their
of their contracts of employment was, therefore, justified. He employment.
pointed out that earlier he had dismissed a case entitled "Lakas ng
Anak-Pawis-NOWM v. Pure Foods Corp." (Case No. RAB-11-02-
00088-88) because the complainants therein were not regular The OSG further maintains that the ruling of the then Secretary of
employees of Pure Foods, as their contracts of employment were Labor and Employment in LAP-NOWM v. Pure Foods
for a fixed period of five months. Moreover, in another case Corporation is not binding on this Court; neither is that ruling
involving the same contractual workers of Pure Foods (Case No. R- controlling, as the said case involved certification election and not
196-ROXI-MED-UR-55-89), then Secretary of Labor Ruben Torres the issue of the nature of private respondents' employment. It also
held, in a Resolution dated 30 April 1990, that the said contractual considers private respondents' quitclaim as ineffective to bar the
workers were not regular employees. enforcement for the full measure of their legal rights.

The Labor Arbiter also observed that an order for private The private respondents, on the other hand, argue that contracts
respondents' reinstatement would result in the reemployment of with a specific period of employment may be given legal effect
more than 10,000 former contractual employees of the petitioner. provided, however, that they are not intended to circumvent the
Beside, by executing a "Release and Quitclaim," the private constitutional guarantee on security of tenure. They submit that the
respondents had waived and relinquished whatever right they might practice of the petitioner in hiring workers to work for a fixed
have against the petitioner. duration of five months only to replace them with other workers of
the same employment duration was apparently to prevent the
regularization of these so-called "casuals," which is a clear
The private respondents appealed from the decision to the National circumvention of the law on security of tenure.
Labor Relations Commission (NLRC), Fifth Division, in Cagayan de
Oro City, which docketed the case as NLRC CA No. M-001323-93. We find the petition devoid of merit.

On 28 October 1994, the NLRC affirmed the Labor Arbiter's Article 280 of the Labor Code defines regular and casual
decision. 3 However, on private respondents' motion for employment as follows:
reconsideration, the NLRC rendered another decision on 30
January 1995 4 vacating and setting aside its decision of 28 October Art. 280. Regular and Casual Employment. — The provisions
1994 and holding that the private respondent and their co- of written agreement to the contrary notwithstanding and
complainants were regular employees. It declared that the contract regardless of the oral argument of the parties, an employment
of employment for five months was a "clandestine scheme shall be deemed to be regular where the employee has been
employed by [the petitioner] to stifle [private respondents'] right to engaged to perform activities which are usually necessary or
security of tenure" and should therefore be struck down and desirable in the usual business or trade of the employer,
disregarded for being contrary to law, public policy, and morals. except where the employment has been fixed for a specific
Hence, their dismissal on account of the expiration of their project or undertaking the completion or termination of which
respective contracts was illegal. has been determined at the time of the engagement of the
employee or where the work or services to be performed is
Accordingly, the NLRC ordered the petitioner to reinstate the private seasonal in nature and the employment is for the duration of
respondents to their former position without loss of seniority rights the season.
and other privileges, with full back wages; and in case their
reinstatement would no longer be feasible, the petitioner should pay An employment shall be deemed to be casual if it is not
them separation pay equivalent to one-month pay or one-half-month covered by the preceding paragraph; Provided, That, any
pay for every year of service, whichever is higher, with back wages employee who has rendered at least one year of service,
and 10% of the monetary award as attorney's fees. whether such service is continuous or broken, shall be
 considered a regular employee with respect to the activity in called "casual" employees; (2) that as of July 1991, "casual"
which he is employed and his employment shall continue while workers numbered 1,835; and regular employee, 263; (3) that the
such activity exists. company hired "casual" every month for the duration of five months,
after which their services were terminated and they were replaced
by other "casual" employees on the same five-month duration; and
Thus, the two kinds of regular employees are (1) those who are
(4) that these "casual" employees were actually doing work that
engaged to perform activities which are necessary or desirable in
were necessary and desirable in petitioner's usual business.
the usual business or trade of the employer; and (2) those casual
employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activity in which they are As a matter of fact, the petitioner even stated in its position paper
employed. 6 submitted to the Labor Arbiter that, according to its records, the
previous employees of the company hired on a five-month basis
In the instant case, the private respondents' activities consisted in numbered about 10,000 as of July 1990. This confirms private
the receiving, skinning, loining, packing, and casing-up of tuna fish respondents' allegation that it was really the practice of the
which were then exported by the petitioner. Indisputably, they were company to hire workers on a uniformly fixed contract basis and
performing activities which were necessary and desirable in replace them upon the expiration of their contracts with other
petitioner's business or trade. workers on the same employment duration.

Contrary to petitioner's submission, the private respondents could This scheme of the petitioner was apparently designed to prevent
not be regarded as having been hired for a specific project or the private respondents and the other "casual" employees from
undertaking. The term "specific project or undertaking" under Article attaining the status of a regular employee. It was a clear
280 of the Labor Code contemplates an activity which is not circumvention of the employees' right to security of tenure and to
commonly or habitually performed or such type of work which is not other benefits like minimum wage, cost-of-living allowance, sick
done on a daily basis but only for a specific duration of time or until leave, holiday pay, and 13th month pay. 11 Indeed, the petitioner
completion; the services employed are then necessary and succeeded in evading the application of labor laws. Also, it saved
desirable in the employer's usual business only for the period of itself from the trouble or burden of establishing a just cause for
time it takes to complete the project. 7 terminating employees by the simple expedient of refusing to renew
the employment contracts.
The fact that the petitioner repeatedly and continuously hired
workers to do the same kind of work as that performed by those The five-month period specified in private respondents' employment
whose contracts had expired negates petitioner's contention that contracts having been imposed precisely to circumvent the
those workers were hired for a specific project or undertaking only. constitutional guarantee on security of tenure should, therefore, be
struck down or disregarded as contrary to public policy or
morals. 12 To uphold the contractual arrangement between the
Now on the validity of private respondents' five-month contracts of
petitioner and the private respondents would, in effect, permit the
employment. In the leading case of Brent School,
former to avoid hiring permanent or regular employees by simply
Inc. v. Zamora, 8 which was reaffirmed in numerous subsequent
hiring them on a temporary or casual basis, thereby violating the
cases, 9 this Court has upheld the legality of fixed-term employment.
employees' security of tenure in their jobs. 13
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 by the parties for the commencement and The execution by the private respondents of a "Release and
termination of their employment relationship. But, this Court went on Quitclaim" did not preclude them from questioning the termination of
to say that where from the circumstances it is apparent that the their services. Generally, quitclaims by laborers are frowned upon
periods have been imposed to preclude acquisition of tenurial as contrary to public policy and are held to be ineffective to bar
security by the employee, they should be struck down or recovery for the full measure of the workers' rights. 14 The reason for
disregarded as contrary to public policy and morals. the rule is that the employer and the employee do not stand on the
same footing. 15
Brent also laid down the criteria under which term employment
Notably, the private respondents lost not time in filing a complaint
cannot be said to be in circumvention of the law on security of
for illegal dismissal. This act is hardly expected from employees
tenure:
who voluntarily and freely consented to their dismissal. 16
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 The NLRC was, thus, correct in finding that the private respondents
other circumstances vitiating his consent; or were regular employees and that they were illegally dismissed from
2) It satisfactorily appears that the employer and the employee dealt their jobs. Under Article 279 of the Labor Code and the recent
with each other on more or less equal terms with no moral jurisprudence, 17 the legal consequence of illegal dismissal is
dominance exercised by the former over the latter. 10 reinstatement without loss of seniority rights and other privileges,
None of these criteria had been met in the present case. As pointed with full back wages computed from the time of dismissal up to the
out by the private respondents: time of actual reinstatement, without deducting the earnings derived
elsewhere pending the resolution of the case.
[I]t could not be supposed that private respondents and all
other so-called "casual" workers of [the petitioner]
However, since reinstatement is no longer possible because the
KNOWINGLY and VOLUNTARILY agreed to the 5-month
petitioner's tuna cannery plant had, admittedly, been close in
employment contract. Cannery workers are never on equal
November 1994, 18 the proper award is separation pay equivalent to
terms with their employers. Almost always, they agree to any
one month pay or one-half month pay for every year of service,
terms of an employment contract just to get employed
whichever is higher, to be computed from the commencement of
considering that it is difficult to find work given their ordinary
their employment up to the closure of the tuna cannery plant. The
qualifications. Their freedom to contract is empty and hollow
amount of back wages must be computed from the time the private
because theirs is the freedom to starve if they refuse to work
respondents were dismissed until the time petitioner's cannery plant
as casual or contractual workers. Indeed, to the unemployed,
ceased operation. 19
security of tenure has no value. It could not then be said that
petitioner and private respondents "dealt with each other on
WHEREFORE, for lack of merit, the instant petition is DISMISSED
more or less equal terms with no moral dominance whatever
and the challenged decision of 30 January 1995 of the National
being exercised by the former over the latter. 10
Labor Relations Commission in NLRC CA No. N-001323-93 is
hereby AFFIRMED subject to the above modification on the
The petitioner does not deny or rebut private respondents' computation of the separation pay and back wages. SO ORDERED.
averments (1) that the main bulk of its workforce consisted of its so-