G.R. No. 202215, December 09, 2015
VICMAR DEVELOPMENT CORPORATION AND/OR ROBERT KUA, OWNER, AND ENGR. JUANITO C. PAGCALIWAGAN, MANAGER, PETITIONERS, VS. CAMILO ELARCOSA, ET AL., RESPONDENTS.

FACTS

Respondents filed consolidated complaints for illegal dismissal and money claims against Vicmar Development Corporation (Vicmar), its owner Robert Kua, and manager Juanito Pagcaliwagan. Respondents alleged they were employed by Vicmar, a plywood manufacturer, in various capacities necessary to its business (e.g., boiler tenders, operators, maintenance) as early as 1990. They claimed they performed necessary and desirable work, often for long hours, but were paid only minimum wage without statutory benefits and were labeled as “extra” workers. In 2004, Vicmar informed them they would be handled by contractors, leading to wage reductions. After respondents filed a complaint with the DOLE for labor standards violations, many of them, including their relatives, were no longer scheduled for work starting September 13, 2004. They argued they were regular employees illegally dismissed without cause or due process. Petitioners contended respondents were merely seasonal or “extra” workers engaged only during high demand or employee absences, and their engagement was not continuous. Petitioners stated that hiring independent contractors was a valid management prerogative for cost-saving. The Executive Labor Arbiters dismissed the complaints, ruling respondents were seasonal employees. The NLRC affirmed this. The Court of Appeals reversed, finding respondents were regular employees and were illegally dismissed.

ISSUE

Whether the respondents were regular employees of Vicmar and were illegally dismissed.

RULING

Yes. The Supreme Court affirmed the Court of Appeals’ decision. The respondents were regular employees of Vicmar. Their tasks (e.g., boiler tending, plywood repair) were necessary, desirable, and directly related to Vicmar’s main business of plywood manufacturing, which operates year-round. The nature of the business is not seasonal. The repeated and continuing need for their services over many years, despite being called “extra” workers, made them regular employees under Article 280 of the Labor Code. The fact that Vicmar paid their wages directly and supervised their work further established an employer-employee relationship. Their dismissal, effected by simply not giving them further work assignments after they filed a DOLE complaint, constituted illegal dismissal for lack of just or authorized cause and due process. The defense of seasonal employment and the hiring of contractors were unavailing as the work was integral to Vicmar’s regular operations. The Court ordered petitioners to reinstate respondents and pay full backwages, plus separation pay if reinstatement is not feasible.