G.R. No. 187320 , January 26, 2011
ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, Petitioners, vs. APRILITO R. SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMOITE, and JOSEPH S. SAGUN, Respondents.

FACTS

Respondents Aprilito R. Sebolino, Khim V. Costales, Alvin V. Almoite, and Joseph S. Sagun, along with other co-workers, filed complaints for illegal dismissal, regularization, and money claims against petitioner Atlanta Industries, Inc., a steel pipe manufacturer, and its President Robert Chan. The complainants alleged they attained regular status after working for more than six months under purported apprenticeship agreements and were illegally dismissed upon the agreements’ expiration. Petitioners defended that the workers were legitimate apprentices under a government-approved program and were not prior employees, as their names did not appear in the company’s Master List of employees. During proceedings, some complainants executed a withdrawal or entered into a compromise agreement. The Labor Arbiter found the termination of nine workers illegal. The NLRC, on appeal, modified this by withdrawing the illegal dismissal finding for Sagun, Mabanag, Sebolino, and Pedregoza; affirming dismissal of complaints for some workers; and approving a compromise agreement involving Costales, Almoite, and others. Sebolino, Costales, Almoite, and Sagun challenged the NLRC decision via certiorari in the CA.

ISSUE

Whether the Court of Appeals erred in ruling that respondents Costales, Almoite, Sebolino, and Sagun were regular employees illegally dismissed, thereby nullifying the apprenticeship agreements and the compromise agreement.

RULING

The Supreme Court DENIED the petition and AFFIRMED the CA decision. The Court held:
1. Prior Employment Established: The CA correctly found respondents were employees before the apprenticeship agreements based on authentic company documents—a Monthly Report for December 2003 showing Costales and Almoite’s shift assignments, and a Production and Work Schedule for March 2004 showing Sebolino and Sagun’s work schedules. Petitioners’ bare denial and reliance on an unsworn Master List, which was not a comprehensive payroll record, failed to rebut this evidence.
2. Invalid Apprenticeship Agreements: The apprenticeship agreements were defective and invalid. They did not specify the trade or occupation for training, and critically, the first agreements were executed before the apprenticeship program was approved by TESDA, violating implementing rules. The subsequent second agreements were also void as they effectively extended training beyond the permissible period for apprentices who were already performing tasks necessary and desirable to the company’s business.
3. Regular Employment Status: Respondents, working as machine operators, extruder operators, and scalemen—positions necessary and desirable to Atlanta’s manufacturing business—were regular employees. Their dismissal at the end of the void apprenticeship agreements was illegal for lack of just or authorized cause and due process.
4. Compromise Agreement Not Binding: The compromise agreement was not binding on Costales and Almoite as they did not sign it. Petitioners’ own admission showed they were excluded because they had already been regularized, confirming their status as regular employees entitled to security of tenure.
The NLRC committed grave abuse of discretion in disregarding the evidence of prior employment and upholding the invalid apprenticeship agreements. Respondents were illegally dismissed and entitled to reinstatement and full backwages.