- Petitioner
- Osmalik S. Bustamante
- Respondent
- NLRC
- Citation
- G.R. No. 111651
- Court
- Supreme Court
- Decided
- March 15, 1996
Whether petitioners are entitled to backwages after being found to be regular employees who were illegally dismissed from their employment
Summary
This Supreme Court case involved five agricultural workers who were illegally dismissed by Evergreen Farms, Inc., a banana plantation company. The workers had been employed at various periods from 1985-1989 and were rehired in 1989 with six-month contracts, but were terminated in June 1990 allegedly due to poor performance and age. The Labor Arbiter found the dismissal illegal and awarded backwages, which the NLRC initially affirmed but later deleted on reconsideration, claiming the company acted without bad faith. The Supreme Court reversed the NLRC's deletion of backwages, holding that the workers had become regular employees under Article 280 of the Labor Code through their performance of necessary activities and more than one year of broken service. The Court found bad faith in the company's pattern of using probationary contracts as a 'convenient subterfuge' to deny regular employee status, and ordered full backwages from dismissal until reinstatement. This decision reinforced the protection of workers' tenurial interests against employer manipulation of employment classifications.
Focus of dispute
Whether petitioners are entitled to backwages after being found to be regular employees who were illegally dismissed from their employment
Legal facts
Petitioners were agricultural workers (laborers, harvesters, sprayer) employed by Evergreen Farms, Inc., a banana plantation company in Davao del Norte. They worked at various periods from 1985-1989, then were hired again in September 1989 with 6-month contracts from January 2 to July 2, 1990. All petitioners were terminated on June 25, 1990, allegedly due to poor performance on account of age (all were over 40 years old). Company claimed they were probationary employees, but they had rendered more than one year of broken/non-continuous service performing activities necessary to the company's business operations.
Judgement and reasoning
Labor Arbiter: Rendered judgment on April 26, 1991 declaring the dismissal of complainants as illegal and ordering Evergreen Farms, Inc. to immediately reinstate complainants with six months backwages totaling P62,404.58. Found that if reinstatement is no longer feasible, additional one month salary shall be awarded as separation pay. Dismissed claims for underpayment of wages for lack of merit.
National Labor Relations Commission (NLRC): On March 8, 1993, dismissed the appeal of private respondent company for lack of merit, affirming the Labor Arbiter's decision. However, on May 3, 1993, upon motion for reconsideration, issued a second resolution affirming the finding of illegal dismissal but deleting the award of backwages on the ground that the termination was the result of company's mistaken interpretation of the law and was not necessarily attended by bad faith or arbitrariness.
Supreme Court (SC): Ruled in favor of petitioners on March 15, 1996. Found that petitioners became regular employees under Article 280 of the Labor Code having performed activities necessary in the usual business of the employer and having rendered non-continuous service for more than one year. Rejected NLRC's theory that company should not pay backwages due to lack of bad faith, finding that the pattern of hiring and re-hiring petitioners without considering them regular employees evidenced bad faith and was a 'convenient subterfuge' to prevent them from becoming regular employees. Distinguished Manila Electric Company case and ordered payment of full backwages from time of illegal dismissal until actual reinstatement.