GR 150658; (February, 2007) (Digest)
G.R. No. 150658 February 9, 2007
NOELITO FABELA, MARCELO DELA CRUZ III, ROGELIO LASAT, HENRY MALIWANAG, MANUEL DELOS SANTOS, and ROMMEL QUINES, Petitioners, vs. SAN MIGUEL CORPORATION and ARMAN HICARTE, Respondents.
FACTS
Petitioners were hired by San Miguel Corporation (SMC) as “Relief Salesmen” under successive “Contracts of Employment With Fixed Period.” Their employment spanned several years, with hiring dates ranging from 1991 to 1995 and terminations occurring from 1996 to 1997. SMC claimed the fixed-term hiring was necessary due to a company transition from a “Route System” to a “Pre-Selling System,” which required new “Accounts Specialists” with upgraded qualifications. Petitioners were engaged to temporarily fill sales roles during this transition and training period for regular employees.
Upon SMC’s refusal to renew their contracts, petitioners filed complaints for illegal dismissal. The Labor Arbiter and the National Labor Relations Commission (NLRC) ruled in favor of petitioners, declaring them regular employees illegally dismissed and ordering their reinstatement with backwages. The Court of Appeals reversed this decision, upholding the validity of the fixed-term contracts and the legality of the termination upon contract expiration.
ISSUE
Whether petitioners were regular employees or legally hired under valid fixed-term contracts, the expiration of which justified the termination of their employment.
RULING
The Supreme Court ruled that petitioners were regular employees illegally dismissed. The Court applied Article 280 of the Labor Code, which deems employment regular where an employee performs activities usually necessary or desirable in the employer’s business, regardless of any written agreement stating otherwise. The activities of Relief Salesmen were clearly necessary and integral to SMC’s usual trade of selling and delivering its products.
The Court found the defense of a legitimate transition period unsubstantiated. The successive renewals of contracts over several years, with petitioners performing the same routinary sales duties, demonstrated that their work was not tied to a specific, temporary project with a predetermined completion date. The transition system was a regular business process, not a singular project. Furthermore, the circumstances indicated that the fixed-term contracts were imposed to preclude petitioners from attaining regular status, a scheme circumventing security of tenure. Since petitioners were regular employees, their dismissal based solely on the expiration of the fixed-term contracts was illegal, absent any just or authorized cause under the Labor Code. The Court reinstated the NLRC decision.