PHILIPPINE VILLAGE HOTEL, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION) AND TUPAS LOCAL CHAPTER NO. 1362, JUANITO ACUIN, MAMERTA MANGUBAT, RAUL SONON, EL…

This is a petition
for certiorari under Rule 65 of the Rules of Court with a prayer for the
issuance of a temporary restraining order to annul and set aside the decision^[1]
promulgated on November 7, 1991 by the National Labor Relations Commission
(NLRC) of Manila reversing the decision dated December 19, 1989 of the Labor
Arbiter Cornelio L. Linsangan.

It appears on record that private respondents Juanito Acuin,
Mamerta Mangubat, Raul Sonon, Elgar Pemis, Orlando Paraguison, Ferdinand
Velasco, Mike Astulero, Magno Decalso, Nenita Orosea, Jose Timing, Antonio
Manalili, Rodelio Queria and Reynaldo Santos were employees of petitioner
Philippine Village Hotel. However, on
May 19, 1986, petitioner had to close and totally discontinue its operations
due to serious financial and business reverses resulting in the termination of
the services of its employees.

Thereafter, the Philippine Village Hotel Employees and Workers
Union filed against petitioner a complaint for separation pay, unfair labor
practice and illegal lock-out.

On May 27, 1987, the Labor Arbiter issued an Order finding the
losses suffered by petitioner to be actual, genuine and of such magnitude as to
validly terminate the services of private respondents but directed petitioner
“to give priority to the complainants (herein private respondents) in [the]
hiring of personnel should they resume their business operations in the
future.”^[2]

On appeal, the NLRC affirmed the validity of the closure of
petitioner but ordered petitioner to pay private respondents separation pay at
the rate of 1/2 month pay for every year of service. However, there is nothing in the records to show that private
respondents received their separation pay as the decision of the NLRC remained
unenforced as of this date.

On February 1, 1985, petitioner decided to have a one (1) month
dry-run operation to ascertain the feasibility of resuming its business
operations. In order to carry out its
dry-run operation, petitioner hired casual workers, including private respondents, for a one (1) month
period, or from February 1, 1989 to March 1, 1989, as evidenced by the latter’s
Contract of Employment.^[3]

After evaluating the individual performance of all the employees
and upon the lapse of the contractual one-month period or on March 2, 1989,
petitioner terminated the services of private respondents.

On April 6, 1989, private respondents and Tupas Local Chapter No.
1362 filed a complaint against petitioner for illegal dismissal and unfair
labor practice with the NLRC-NCR Arbitration Branch in NLRC Case No.
00-04-01665-89.

On December 19, 1989, the Labor Arbiter rendered a decision, the
dispositive portion of which reads, as follows:

“WHEREFORE, finding the above-entitled complaint to be without
factual and legal basis, judgment is hereby rendered dismissing the same.”^[4]

Thereafter, private respondents appealed to the public respondent
NLRC.

On November 7, 1991, public respondent NLRC reversed the decision
of the Labor Arbiter, the dispositive portion of which reads, as follows:

“WHEREFORE, under the premises, let the decision appealed from be,
as it is hereby reversed, and a new judgment rendered, hereby ordering the
respondent Philippine Village Hotel to reinstate the above-named complainants
to their former or substantially equivalent positions without loss of seniority
rights plus full backwages from the time they were actually dismissed on 02
March 1989 up to the time of their actual reinstatement, but which period of
time should not exceed three (3) years.

“The complaint for unfair labor practice is hereby dismissed for
lack of adequate factual basis.”^[5]

On March 5, 1992, petitioner’s Motion for Reconsideration was
denied for lack of merit.

Hence, this petition
alleging grave abuse of discretion on the part of the public respondent NLRC in finding that private
respondents are regular employees of petitioner considering that the latter’s services were already previously
terminated in 1986 and that their employment contracts specifically provided
only for a temporary one-month period of employment.

The petition is impressed with merit.

An examination of the contents of the private respondents’
contracts of employment shows that indeed private respondents voluntarily and
knowingly agreed to be employed only for a period of one (1) month or from
February 1, 1989 to March 1, 1989.

The fact that private respondents were required to render
services usually necessary or desirable in the operation of petitioner’s
business for the duration of the one (1) month dry-run operation period does
not in any way impair the validity of the contractual nature of private
respondents’ contracts of employment which specifically stipulated that the
employment of the private respondents was only for one (1) month.

In upholding the validity of a contract of employment with a
fixed or specific period, we have held that the decisive determinant in term
employment should not be the activities that the employee is called upon to
perform, but the day certain
agreed upon by the parties for the commencement and termination of their
employment relationship, a day
certain being understood to be that which must necessarily come,
although it may not be known when. The
term period was further defined to be the length
of existence; duration. A point of time
marking a termination as of a cause or an activity; an end, a limit, a bound;
conclusion; termination. A series of
years, months or days in which something is completed. A time of definite length or the period from
one fixed date to another fixed date.^[6] This
ruling is only in consonance with Article 280 of the Labor Code which provides:

“ART. 280. Regular and
Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment is
for the duration of the season.

“An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided,
That, any employee who has rendered at least one year of service, whether such
service is 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 actually exists.”

Inasmuch as private respondents’ contracts of employment
categorically provided a fixed period and their termination had already been
agreed upon at the time of their engagement, private respondents’ employment
was one with a specific period or day certain agreed upon by the parties. In Philippine National Oil Company-Energy Development
Corporation vs. NLRC,^[7] we
held that:

“As can be gleaned from the said case (Brent School, Inc. vs.
Zamora, 181 SCRA 702), the two guidelines by which fixed contracts of
employments can be said NOT to circumvent security of tenure, are either:

“1. The fixed period
of employment was knowingly and voluntarily agreed upon by the parties, without
any force, duress or improper pressure being brought to bear upon the employee
and absent any other circumstances vitiating his consent; or

“2.  It satisfactorily appears that the employer
and employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former on the latter.”

In the instant case, private respondents were validly terminated by the petitioner when the latter had
to close its business due to financial losses. Following the directives of the NLRC
to give priority in hiring private respondents should it resume its business, petitioner hired private respondents
during their one (1) month dry-run operation. However, this does not mean that private respondents were deemed to have
continued their regular employment status, which they had enjoyed before their
aforementioned termination due to petitioner’s financial losses. As stated by the Labor Arbiter in his
decision:

“It should be borne in mind that when complainants were first
terminated as a result of the company’s cessation from operation in May, 1986
the employer-employee relationship between the parties herein was totally and
completely severed. Such being the
case, respondent acted well within its discretion when in rehiring the
complainants (herein private respondents) it made them casual and for a
specific period. The complainants are
no better than the new employees of respondent (petitioner) for the matter of
what status or designation to be given them exclusively rests in the discretion
of management.”^[8]

Besides, the previous decision of the public respondent NLRC in
Case No. 8-3277-86 finding the termination of private respondents’ employment
to be valid has long become final and executory. Public respondent NLRC cannot anymore argue that the temporary
cessation of the petitioner’s operation due to financial reverses merely
suspended private respondents’ employment. The employee-employer relationship had come to an end when the employer
had closed its business and ceased operations. The hiring of new employees when it re-opened after three (3) years is
valid and to be expected. The prior
employment which was terminated cannot be joined or tacked to the new
employment for purposes of security of tenure.

While it is true that security of tenure is a constitutionally
guaranteed right of the employees, it does not, however, mean perpetual
employment for the employee because our law, while affording protection to the
employee, does not authorize oppression or destruction of an employer. It is well settled that the employer has the
right or is at liberty to choose who will be hired and who will be denied
employment. The right of a laborer to
sell his labor to such persons as he may choose is, in its essence, the same as
the right of an employer to purchase labor from any person whom it
chooses. The employer and the employee
have an equality of right guaranteed by the Constitution. If the employer can compel the employee to
work against the latter’s will, this is servitude. If the employee can compel the employer to give him work against
the employer’s will, this is oppression.^[9]

Thus, public respondent NLRC had indubitably committed grave
abuse of discretion when it modified the final decision of the NLRC Case No.
8-3277-86 which remain unenforced as of this date. Private respondents’ remedy is to file a motion for execution, if
it is still within the reglementary 5-year period, or to file an action to
enforce said decision. (Article 224(a),
Labor Code)

WHEREFORE, this petition for certiorari is GRANTED
and the questioned decision of the public respondent NLRC is hereby SET ASIDE
thereby dismissing the complaint against petitioner.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, Regalado, and Puno, JJ., concur.

^[1]
Penned by Commissioner Edna Bonto-Perez with the concurrence of Commissioner Domingo H. Zapanta and Commissioner
Rustico L. Diokno.

^[2]
Rollo, p. 24.

^[3]
Id., at pp. 35-41, Annex “C”-”I”.

^[4]
Id., at p. 45.

^[5]
Id., at pp. 32-33.

^[6]
Escareal vs. National Labor Relations Commissions, 213 SCRA 472 [1992].

^[7]
G.R. No. 97747, promulgated on March 31, 1993.

^[8]
Rollo, pp. 44-45.

^[9]
International Catholic Migration Commission vs. NLRC, 169 SCRA 606,
January 30, 1989.