G.R. No. 86408 February 15, 1990
BETA ELECTRIC CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER CRESENCIO INIEGO, BETA ELECTRIC EMPLOYEES ASSOCIATION, and LUZVIMINDA PETILLA, respondents.

FACTS

Petitioner Beta Electric Corporation hired private respondent Luzviminda Petilla as a clerk typist under a series of fixed-term employment contracts from December 15, 1986. Her initial contract was until January 16, 1987, and she received successive extensions, each covered by a written contract, ultimately lasting until June 30, 1987. On June 22, 1987, prior to the expiry of her last contract, her services were terminated without notice or investigation. Petilla immediately filed a complaint for illegal dismissal.
The Labor Arbiter ruled in favor of Petilla, ordering her reinstatement with backwages. The National Labor Relations Commission (NLRC) affirmed this decision. Beta Electric Corporation elevated the case to the Supreme Court, arguing that Petilla was merely a temporary employee hired to meet peak business demands and that her fixed-term contracts legally permitted termination at the end of each contract period.

ISSUE

Whether the series of fixed-term employment contracts rendered Petilla a temporary employee who could be lawfully terminated, or whether she attained the status of a regular employee entitled to security of tenure.

RULING

The Supreme Court dismissed the petition and affirmed the NLRC decision, ruling that Petilla was illegally dismissed as she had attained regular employment status. The Court rejected the petitioner’s argument that the contract-to-contract arrangement defined her as a temporary employee. The legal logic centered on the application of Article 280 (now Article 295) of the Labor Code, which defines regular and casual employment.
The Court held that regardless of the written contracts, the nature of Petilla’s work as a clerk typist was “usually necessary or desirable in the usual business or trade of the employer.” Such work is not “specific” or “seasonal” as defined by law to justify temporary status. A “specific undertaking” refers to a project with a clearly defined scope and completion date, like construction work, not routine clerical duties. Furthermore, her employment from December 15, 1986, to June 22, 1987, exceeded six months. Under Article 281 (now Article 296), a probationary employee who is allowed to work after the probationary period shall be considered a regular employee. By operation of law, Petilla became a regular employee.
The series of short-term contracts were deemed an artifice to circumvent her right to security of tenure. Contracts cannot override the mandatory provisions of labor law intended to protect workers. Consequently, her dismissal without just or authorized cause and without due process was illegal. The Court ordered her reinstatement with three years of backwages without qualification or deductions.