Jamias etc. vs.

NLRC
ALUMAMAY O. JAMIAS, JENNIFER C. MATUGUINAS AND JENNIFER F. CRUZ,* PETITIONERS, VS. NATIONAL
LABOR RELATIONS COMMISSION (SECOND DIVISION), HON. COMMISSIONERS: RAUL T. AQUINO,
VICTORIANO R. CALAYCAY AND ANGELITA A. GACUTAN; HON. LABOR ARBITER VICENTE R. LAYAWEN;
INNODATA PHILIPPINES, INC., INNODATA PROCESSING CORPORATION, (INNODATA CORPORATION), AND
TODD SOLOMON, RESPONDENTS.

G.R. No. 159350 | 2016-03-09

DECISION

BERSAMIN, J.:

The petitioners appeal the adverse judgment promulgated on July 31, 2002,[1] whereby the Court of Appeals (CA) upheld the ruling of
the National Labor Relations Commission (NLRC) declaring them as project employees hired for a fixed period.

Antecedents

Respondent Innodata Philippines, Inc. (Innodata), a domestic corporation engaged in the business of data processing and conversion

for foreign clients,[2] hired the following individuals on various dates and under the following terms, to wit:

Name Position Duration of Contract

Alumamay Jamias Manual Editor August 7, 1995 to August 7, 1996[3]

Marietha V. Delos Santos Manual Editor August 7, 1995 to August 7, 1996[4]

Lilian R. Guamil Manual Editor August 16, 1995 to August 16, 1996[5]

Rina C. Duque Manual Editor August 7, 1995 to August 7, 1996[6]

Marilen Agabayani Manual Editor August 23, 1995 to August 23, 1996[7]

Alvin V. Patnon Production Personnel September 1, 1995 to September 1, 1996[8]

Analyn I. Beter Type Reader September 18, 1995 to September 18, 1996[9]

Jerry O. Soldevilla Production Personnel September 18, 1995 to September 18, 1996[10]

Ma. Concepcion A. Dela Cruz Production Personnel September 18, 1995 to September 18, 1996[11]

Jennifer Cruz Data Encoder November 20, 1995 to November 20, 1996[12]

Jennifer Matuguinas Data Encoder November 20, 1995 to November 20, 1996[13]

After their respective contracts expired, the aforenamed individuals filed a complaint for illegal dismissal claiming that Innodata had

made it appear that they had been hired as project employees in order to prevent them from becoming regular employees.[14]

Decision of the Labor Arbiter

On September 8, 1998, Labor Arbiter (LA) Vicente Layawen rendered his decision dismissing the complaint for lack of merit.[15] He
found and held that the petitioners had knowingly signed their respective contracts in which the durations of their engagements were
clearly stated; and that their fixed term contracts, being exceptions to Article 280 of the Labor Code, precluded their claiming

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regularization.

Ruling of the National Labor Relations Commission

On appeal, the NLRC affirmed the decision of LA Layawen,[16] opining that Article 280 of the Labor Code did not prohibit employment
contracts with fixed periods provided the contracts had been voluntarily entered into by the parties, viz.:

[I]t is distinctly provided that complainants were hired for a definite period of one year incidental upon the needs of the respondent by
reason of the seasonal increase in the volume of its business. Consequently, following the rulings in Pantranco North Express, Inc. vs.
NLRC, et al., G.R. No. 106654, December 16, 1994, the decisive determinant in term of 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." Further, Article 280 of the Labor Code does not prescribe or prohibit an employment contract with a fixed period provided, the
same is entered into by the parties, without any force, duress or improper pressure being brought to bear upon the employee and
absent any other circumstance vitiating consent. It does not necessarily follow that where the duties of the employee consist of
activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of
time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment

and the nature of the employee's duties. x x x[17]

Judgment of the CA

As earlier mentioned, the CA upheld the NLRC. It observed that the desirability and necessity of the functions being discharged by the
petitioners did not make them regular employees; that Innodata and the employees could still validly enter into their contracts of

employment for a fixed period provided they had agreed upon the same at the time of the employees' engagement;[18] that Innodata's
operations were contingent on job orders or undertakings for its foreign clients; and that the availability of contracts from foreign

clients, and the duration of the employments could not be treated as permanent, but coterminous with the projects.[19]

The petitioners moved for reconsideration,[20] but the CA denied their motion on August 8, 2003.[21]

Hence, this appeal by only three of the original complainants, namely petitioners Alumamay Jamias, Jennifer Matuguinas and Jennifer
Cruz.

Issues

The petitioners anchor their appeal on the following:

THE HON. COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION OR IN
EXCESS OF JURISDICTION AS IT CANNOT REVERSE OR ALTER THE SUPREME COURT DECISION

THE SUPREME COURT HAS RULED THAT THE NATURE OF EMPLOYMENT AT RESPONDENTS IS REGULAR NOT FIXED OR
CONTRACTUAL IN AT LEAST TWO (2) CASES AGAINST INNODATA PHILS., INC.

II

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THE HON. COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW WHEN IT DID NOT STICK TO PRECENDENT AS IT HAS
ALREADY RULED IN AN EARLIER CASE THAT THE NATURE OF EMPLOYMENT AT INNODATA PHILS., INC. IS REGULAR AND
NOT CONTRACTUAL

III

THE HON. COURT OF APPEALS PATENTLY ERRED IN LAW AND COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION IN RULING THAT PETITIONERS' EMPLOYMENT IS FOR A FIXED PERIOD CO-TERMINOUS WITH A
PROJECT WHEN THERE IS NO PROJECT TO SPEAK OF

IV

THE HON. COURT OF APPEALS PALPABLY ERRED IN LAW IN RULING THAT THE STIPULATION IN CONTRACT IS GOVERNING

AND NOT THE NATURE OF EMPLOYMENT AS DEFINED BY LAW.[22]

The petitioners maintain that the nature of employment in Innodata had been settled in Villanueva v. National Labor Relations

Commission (Second Division)[23] and Servidad v. National Labor Relations Commission,[24]whereby the Court accorded regular
status to the employees because the work they performed were necessary and desirable to the business of data encoding, processing

and conversion.[25] They insist that the CA consequently committed serious error in not applying the pronouncement in said rulings,
thereby ignoring the principle of stare decisis in declaring their employment as governed by the contract of employment; that the CA
also erroneously found that the engagement of the petitioners was coterminous with the project that was nonexistent; that Innodata
engaged in "semantic interplay of words" by introducing the concept of "fixed term employment" or "project employment" that were not

founded in law;[26] and that Article 280 of the Labor Codeguarantees the right of workers to security of tenure, which rendered the

contracts between the petitioners and Innodata meaningless.[27]

In refutation, Innodata insists that the contracts dealt with in Villanueva and Servidad were different from those entered into by the

petitioners herein,[28] in that the former contained stipulations that violated the provisions of theLabor Code on probationary

employment and security of tenure,[29] while the latter contained terms known and explained to the petitioners who then willingly

signed the same;[30] that as a mere service provider, it did not create jobs because its operations depended on the availability of job

orders or undertakings from its client;[31] that Article 280 of the Labor Code allowed "term employment" as an exception to security of
tenure; and that the decisive determinant was the day certain agreed upon by the parties, not the activities that the employees were

called upon to perform.[32]

Were the petitioners regular or project employees of Innodata?

Ruling of the Court

We deny the petition for review on certiorari.

Stare decisis does not apply where the facts are essentially different

Contrary to the petitioners' insistence, the doctrine of stare decisis, by which the pronouncements in Villanuevaand Servidad would

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control the resolution of this case, had no application herein.

The doctrine of stare decisis enjoins adherence to judicial precedents.[33] When a court has laid down a principle of law as applicable
to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same; but
when the facts are essentially different, stare decisis does not apply because a perfectly sound principle as applied to one set of facts

might be entirely inappropriate when a factual variance is introduced.[34]

Servidad and Villanueva involved contracts that contained stipulations not found in the contracts entered by the petitioners. The
cogent observations in this regard by the CA are worth reiterating:

A cursory examination of the facts would reveal that while all the cases abovementioned involved employment contracts with a fixed
term, the employment contract subject of contention in the Servidad and Villanueva cases provided for double probation, meaning,
that the employees concerned, by virtue of a clause incorporated in their contracts, were made to remain as probationary employees
even if they continue to work beyond the six month probation period set by law. Indeed, such stipulation militates against
Constitutional policy of guaranteeing the tenurial security of the workingman. To Our mind, the provision alluded to is what prodded
the Supreme Court to disregard and nullify altogether the terms of the written entente. Nonetheless, it does not appear to be the
intendment of the High Tribunal to sweepingly invalidate or declare as unlawful all employment contracts with a fixed period. To
phrase it differently, the said agreements providing for a one year term would have been declared valid and, consequently, the
separation from work of the employees concerned would have been sustained had their contracts not included any unlawful and
circumventive condition.

It ought to be underscored that unlike in the Servidad and Villanueva cases, the written contracts governing the relations of the

respondent company and the petitioners herein do not embody such illicit stipulation.[35]

We also disagree with the petitioners' manifestation[36] that the Court struck down in Innodata Philippines, Inc. v. Quejada-Lopez[37] a
contract of employment that was similarly worded as their contracts with Innodata. What the Court invalidated in Innodata Philippines,
Inc. v. Quejada-Lopez was the purported fixed-term contract that provided for two periods - a fixed term of one year under paragraph
1 of the contract, and a three-month period under paragraph 7.4 of the contract - that in reality placed the employees under probation.
In contrast, the petitioners' contracts did not contain similar stipulations, but stipulations to the effect that their engagement was for the
fixed period of 12 months, to wit:

1. The EMPLOYER shall employ the EMPLOYEE and the EMPLOYEE shall serve the EMPLOYER in the EMPLOYER'S business as a
MANUAL EDITOR on a fixed term only and for a fixed and definite period of twelve months, commencing on August 7, 1995 and

terminating on August 7, 1996, x x x.[38]

In other words, the terms of the petitioners' contracts did not subject them to a probationary period similar to that indicated in the
contracts struck down in Innodata, Villanueva and Servidad.

II

A fixed period in a contract of employment does not by itself signify an intention to circumvent Article 280 of the Labor
Code

The petitioners argue that Innodata circumvented the security of tenure protected under Article 280 of the Labor Code by providing a
fixed term; and that they were regular employees because the work they performed were necessary and desirable to the business of

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Innodata.

The arguments of the petitioners lack merit and substance.

Article 280 of the Labor Code provides:

Art. 280. Regular and Casual Employment. - The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreements 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 service to be performed is seasonal in nature
and the employment is for the duration of the season.

An employment shall be deemed 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 actuallv exists.

The provision contemplates three kinds of employees, namely: (a) regular employees; (b) project employees; and (c) casuals who are
neither regular nor project employees. The nature of employment of a worker is determined by the factors provided in Article 280 of

t h e Labor Code, regardless of any stipulation in the contract to the contrary.[39] Thus, in Brent School, Inc. v. Zamora,[40] we
explained that the clause referring to written contracts should be construed to refer to agreements entered into for the purpose of
circumventing the security of tenure. Obviously, Article 280 does not preclude an agreement providing for a fixed term of employment

knowingly and voluntarily executed by the parties.[41]

A fixed term agreement, to be valid, must strictly conform with the requirements and conditions provided in Article 280 of the Labor
Code. The test to determine whether a particular employee is engaged as a project or regular employee is whether or not the
employee is assigned to carry out a specific project or undertaking, the duration or scope of which was specified at the time of his

engagement.[42] There must be a determination of, or a clear agreement on, the completion or termination of the project at the time

the employee is engaged.[43] Otherwise put, the fixed period of employment must be 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 it must satisfactorily appear that the employer and employee dealt with each other on more or less equal terms

with no moral dominance whatsoever being exercised by the former on the latter.[44]

The contracts of the petitioners indicated the one-year duration of their engagement as well as their respective project assignments

(i.e., Jamias being assigned to the CD-ROM project; Cruz and Matuguinas to the TSET project).[45] There is no indication that the
petitioners were made to sign the contracts against their will. Neither did they refute Innodata's assertion that it did not employ force,
intimidate or fraudulently manipulate the petitioners into signing their contracts, and that the terms thereof had been explained and

made known to them.[46] Hence, the petitioners knowingly agreed to the terms of and voluntarily signed their respective contracts.

That Innodata drafted the contracts with its business interest as the overriding consideration did not necessarily warrant the holding

that the contracts were prejudicial against the petitioners.[47] The fixing by Innodata of the period specified in the contracts of
employment did not also indicate its ill-motive to circumvent the petitioners' security of tenure. Indeed, the petitioners could not
presume that the fixing of the one-year term was intended to evade or avoid the protection to tenure under Article 280 of the Labor
Code in the absence of other evidence establishing such intention. This presumption must ordinarily be based on some aspect of the
agreement other than the mere specification of the fixed term of the employment agreement, or on evidence aliunde of the intent to

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evade.[48]

Lastly, the petitioners posit that they should be accorded regular status because their work as editors and proofreaders were usually
necessary to Innodata's business of data processing.

We reject this position. For one, it would be unusual for a company like Innodata to undertake a project that had no relationship to its

usual business.[49] Also, the necessity and desirability of the work performed by the employees are not the determinants in term

employment, but rather the "day certain" voluntarily agreed upon by the parties.[50]As the CA cogently observed in this respect:
There is proof to establish that Innodata's operations indeed rests upon job orders or undertakings coming from its foreign clients.
Apparently, its employees are assigned to projects - one batch may be given a fixed period of one year, others, a slightly shorter
duration, depending on the estimated time of completion of the particular job or undertaking farmed out by the client to the

company.[51]
In fine, the employment of the petitioners who were engaged as project employees for a fixed term legally ended upon the expiration
of their contract. Their complaint for illegal dismissal was plainly lacking in merit.

WHEREFORE, we DENY the petition for review on certiorari; AFFIRM the decision promulgated on July 31, 2002; and ORDER the
petitioners to pay the costs of suit

SO ORDERED.

Sereno, C. J., Leonardo-De Castro, Perlas-Bernabe, and Caguioa, JJ., concur.

_____________________________________
* Although the petition for review on certiorari was filed in the names of all the original parties in the Court of Appeals, namely: Alvin V.

Patnon, Marietha V. Delos Santos, Mary Rose V. Macabuhay, Alumamay O. .lamias, Marilen Agbayani, Rina O. Duque, Lilian R.
Guamil, Jerry F. Soldevilla, Ma. Concepcion A. Dela Cruz, Analyn I. Beter, Michael L. Aguirre, Jennifer C. Matuguinas and Jennifer F.
Cruz, the Court captions this decision only with the names of the three who brought this appeal, namely: Alumamay O. Jarnias,
Jennifer C. Maluguinas and Jennifer F. Cruz.

[1] Rollo, pp. 38-46; penned by CA Associate Justice Bienvenido L. Reyes (now a Member of the Court), with Associate Justice

Roberto A. Barrios (retired/deceased) and Associate Justice Edgardo F. Sundiam (retired/deceased), concurring.

[2] Id. at 179-180.

[3] Id. at 217.

[4] CA rollo, pp. 41-42.

[5] Id.

[6] Id.

[7] Id.

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[8] Id.

[9] Id. at 42-43.

[10] Id.

[11] Id.

[12] Rollo, p. 218.

[13] Id. at 219.

[14] CA rollo, p. 48.

[15] Id. at 40-47.

[16] Id. at 25-38.

[17] Id. at 35-36.

[18] Rollo, pp. 43-44.

[19] Id. at 45.

[20] CA rollo, pp. 528-547.

[21] Rollo, pp. 48-49.

[22] Id. at 14.

[23] G.R. No. 127448, September 10, 1998, 295 SCRA 326.

[24] G.R. No. 128682, March 18, 1999, 305 SCRA 49.

[25] Rollo, p. 18.

[26] Id. at 27-28.

[27] Id. at 30-31.

[28] Id. at 186-188.

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[29] Id. at 192-193.

[30] Id. at 195.

[31] Id. at 197-198.

[32] Id. at 190-200.

[33] Lazatin v. Desierto, G.R. No. 147097, June 5, 2009, 588 SCRA 285, 293-294; citing Fermin v. People, G.R. No. 157643, March

28, 2008, 550 SCRA 132, 145.

[34] Hacienda Bino/Hortencia Starke, Inc./Hortencia Starke v. Cuenca, G.R. No. 150478, April 15, 2005, 456 SCRA 300, 309.

[35] Rollo, pp. 42-43.

[36] Id. at 555-562.

[37] G.R. No. 162839, October 12, 2006, 504 SCRA 253.

[38] Rollo, p. 217.

[39] Villa v. National Labor Relations Commission, G.R. No. 117043, January 14, 1998, 284 SCRA 105, 127.

[40] G.R. No. 48494, February 5, 1990, 181 SCRA 702.

[41] Id., at 716.

[42] Violeta v. National Labor Relations Commission, G.R. No. 119523, October 10, 1997, 280 SCRA 520, 528.

[43] Id.

[44] Philippine National Oil Co.-Energy Dev't Corp. v. NLRC, G.R. No. 97747 March 31, 1993, 220 SCRA 695, 699.

[45] Rollo, pp. 217-219.

[46] Id. at 195.

[47] Villa v. National Labor Relations Commission, supra, note 39, at 128.

[48] Pakistan International Airlines Corporation v. Ople, G.R. No. 61594, September 28, 1990, 190 SCRA 90.

[49] ALU-TUCP v. National Labor Relations Commission, G.R. No. 109902, August 2, 1994, 234 SCRA 678, 684.

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[50] Brent School, Inc. v, Zamora, supra, note 40, at 710.

[51] Supra note 1, at 45.

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