Erectors Incorporated v. National Labor Relations Commission
NEW DOCTRINEFacts
The Antecedents: Private respondent was hired by petitioner as Senior Project Manager for a project in Saudi Arabia under an overseas employment contract. Prior to deployment, he was assigned to petitioner's local projects for familiarization. He was deployed to Saudi Arabia, worked for six months, and returned for a vacation. Upon reporting back, he was verbally informed of his contract's termination due to his services no longer being needed. He was later officially informed of the termination effective April 24, 1980. Subsequently, he was offered a new appointment in petitioner's local operations with a lower salary, with a promise of future foreign assignments. This new appointment carried a six-month probationary period. On August 30, 1980, his services under this new appointment were terminated. Procedural History: Private respondent filed a complaint for illegal dismissal with the Philippine Overseas Employment Administration (POEA), which dismissed the complaint for lack of merit and noted that jurisdiction over local employment issues lies with Labor Arbiters. On appeal, the National Labor Relations Commission (NLRC) set aside the POEA decision, ordering petitioner to pay private respondent salary for the unexpired term of the overseas contract and attorney's fees. The Petition: Petitioner filed a petition for certiorari with the Supreme Court, alleging grave abuse of discretion on the part of the NLRC. A temporary restraining order was issued.
Issue(s)
Whether the private respondent was a regular employee at the time of his dismissal. Whether the termination of the private respondent's employment was legal. Whether the NLRC correctly awarded damages based on the overseas contract.
Ruling
The Supreme Court set aside the decision of the NLRC. It ordered the petitioner to reinstate the private respondent without loss of seniority rights, with backwages for three years computed on the basis of his latest salary, without qualification or deduction. Should reinstatement not be possible, petitioner is ordered to pay separation pay as provided by law. The temporary restraining order was lifted.
Ratio Decidendi
On whether the private respondent was a regular employee: The Court found that private respondent's contention of being a regular employee was more in accord with the law. He commenced employment on August 16, 1979, and was continuously employed until August 30, 1980, totaling one year and fifteen days. Article 281 of the Labor Code states that any employee who has rendered at least one year of service, whether continuous or broken, shall be considered a regular employee. The Court clarified that the deployment in Saudi Arabia was a foreign assignment, not a separate employment, and the continuity of employment was maintained even with the retroactive effect of the local appointment to the termination date of the overseas contract. Therefore, private respondent attained regular employee status. On the legality of the termination: As a regular employee, private respondent could only be dismissed for a valid cause provided by law. Petitioner's notice of termination cited "lack of an available position and negative attitude towards work assignments" and proceeded under the theory that the appointment was probationary. However, the Court found that no valid cause for termination was cited or proven. The termination was based on the erroneous belief that the employee was still probationary, thus rendering the dismissal illegal. On the NLRC's award based on the overseas contract: The Court disagreed with the NLRC's award of US $11,500.00 based on the unexpired term of the overseas contract. The Court held that the overseas contract was superseded by the new local appointment, to which the private respondent voluntarily agreed. Therefore, any rights or benefits accruing to the private respondent after April 24, 1980, should be based on the new appointment, not the overseas contract. Furthermore, the Court noted that jurisdiction over the complaint based on the local appointment lies with the Labor Arbiters, not the POEA. However, to avoid protracted litigation, the Court ruled on the merits of the illegal dismissal complaint.
Main Doctrine
An employee who has rendered at least one year of service, whether continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists, notwithstanding any written or oral agreement to the contrary.