G.R. No. 106331 March 9, 1998
International Pharmaceuticals, Inc. vs. National Labor Relations Commission (NLRC), Fourth Division, and Dr. Virginia Camacho Quintia

FACTS

Petitioner International Pharmaceuticals, Inc. (IPI) employed private respondent Virginia Camacho Quintia as Medical Director of its Research and Development department in March 1983 under a written contract for a term of one year, subject to renewal by mutual consent. The contract allowed her to continue teaching. Petitioner claimed she was hired as a project employee for its experimental venture into herbal medicine development. Upon the contract’s expiration on March 19, 1984, Quintia remained in IPI’s employ upon the assurance of security of tenure by the company president, declining another job offer. She continued as Medical Director and also performed duties as company physician until her termination on July 12, 1986. Quintia alleged her termination was due to her advocacy for rank-and-file employees regarding issues with their Savings and Loan Association, which led to a confrontation with management. She was replaced as department head on July 10, 1986, and received a termination memorandum citing expiration of her contract. She filed a complaint for illegal dismissal, seeking reinstatement, backwages, and damages. The Labor Arbiter found illegal dismissal, declaring her a regular employee entitled to security of tenure, and ordered reinstatement with backwages and separation pay if reinstatement was infeasible. The NLRC affirmed the decision.

ISSUE

Whether or not private respondent Virginia Camacho Quintia was a regular employee or a project employee, and consequently, whether her dismissal was illegal.

RULING

The Supreme Court dismissed the petition and affirmed the NLRC’s decision with modification. The Court held that Quintia was a regular employee, not a project employee. After the expiration of her fixed-term contract on March 18, 1984, she continued working without a new written contract, performing work necessary and desirable to petitioner’s business for over three years, which included not only her original duties but also additional functions as company physician. This continuation of employment changed her status to that of a regular employee under Article 280 of the Labor Code. The Court rejected petitioner’s claim that she remained a project employee, noting the absence of a report to the DOLE as required for project employees and the fact that her role was not limited to a specific project but involved ongoing, necessary functions. Her dismissal, based solely on the expired contract without just cause and due process, was illegal. However, due to antagonism and her preference for separation pay, reinstatement was deemed not feasible. The Court modified the award, ordering separation pay equivalent to one month salary for every year of service (instead of one-half month) and backwages for three years from her dismissal date without deduction, consistent with the law prior to the effectivity of R.A. No. 6715 .