G.R. No. 122653 December 12, 1997
PURE FOODS CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, RODOLFO CORDOVA, VIOLETA CRUSIS, ET AL., respondents.

FACTS

The private respondents (906 workers) were hired by petitioner Pure Foods Corporation under fixed-term contracts of five months to work at its tuna cannery plant. After their contracts expired in June and July 1991, their services were terminated. They executed a “Release and Quitclaim” stating they had no claims against the petitioner. Subsequently, they filed a complaint for illegal dismissal. The Labor Arbiter dismissed the complaint, ruling they were contractual workers, not regular employees, and their termination due to contract expiration was justified. The NLRC initially affirmed this decision but, upon motion for reconsideration, reversed itself. The NLRC held the private respondents were regular employees, the five-month contract was a scheme to circumvent security of tenure, and their dismissal was illegal. It ordered reinstatement with back wages or separation pay if reinstatement was not feasible. Pure Foods filed this petition after its motion for reconsideration was denied.

ISSUE

Whether employees hired for a definite period (five months) to perform activities necessary and desirable in the usual business of the employer are regular employees.

RULING

Yes. The Supreme Court dismissed the petition and affirmed the NLRC decision with modification on the computation of awards. The private respondents were regular employees under Article 280 of the Labor Code as they performed activities (receiving, skinning, loining, packing, and casing-up of tuna) necessary and desirable in petitioner’s business. They could not be considered hired for a “specific project or undertaking,” which contemplates non-habitual work for a specific duration, as the petitioner repeatedly and continuously hired workers for the same tasks. The five-month contracts were invalid as they were imposed to preclude the acquisition of security of tenure, violating public policy. The criteria from Brent School, Inc. v. Zamora for valid fixed-term employment were not met, as the employees did not knowingly and voluntarily agree on equal terms. The quitclaim was ineffective to bar their claims. Since the plant had closed, reinstatement was impossible. The proper award is separation pay equivalent to one month pay or one-half month pay for every year of service, whichever is higher, computed from commencement of employment until plant closure, and back wages computed from dismissal until the plant ceased operation.