Almirante: Fixed period of employment

Dominador A. Almirante
·3 min read

Respondent LBP Service Corp. entered into a manpower services agreement with the Land Bank of the Philippines and deployed janitors, messengers and utility persons in its different branches in Metro Manila. These workers are petitioners Julian Tungcul Tuppil and 10 others (Tuppil et al.) and Larry Borja and six others (Borja et al.). They were employed on a contract basis and for a specific period. Their employment contracts expressly stipulated that they are subject to recall under any of the following conditions: a) voluntary resignation, b) non-renewal or termination of contract with the client, and c) company of assignment no longer needs their services. Also stipulated is that respondent shall keep their names in its roster of reserves for future referral and employment with other client company.

In 2014, the contract between LBP Service and the Land Bank expired, resulting in the recall of affected employees which included Tuppil et.al. and Borja et al. Upon receipt of the notices of recall, Tuppil et al. resigned. Thereafter, Tuppil et al. and Borja et al. filed a complaint for illegal dismissal against LBP Service. They alleged that they are regular employees performing services necessary and desirable to LBP Service’s business.

Does this complaint prosper?

Ruling: No.

Contracts of employment for a fixed term are not unlawful unless it is apparent from the circumstances that the periods have been imposed to circumvent the laws on security of tenure. The case of Pure Foods Corp. v. NLRC, 347 Phil. 434 (1997) laid down the criteria of a valid fixed-term employment, to wit:

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 the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.

Moreover, there was no evidence indicating that Tuppil et al. and Borja et al. were pressured into signing their fixed-term contracts or that LBP Service exhibited dominance over them.

They had the chance to refuse, but they consciously accepted their contracts. The periods and conditions stipulated in their contracts were likewise not intended to deny them from acquiring security of tenure. Inarguably, Tuppil et al. and Borja et al. are fixed-term employees. As such, the employment contract governs the relationship of the parties.

Similarly, Tuppil et al. and Borja et al.’s claim that they are regular employees are untenable. The fact that an employee is engaged to perform activities that are necessary and desirable in the usual business of the employer does not prohibit the fixing of employment for a definite period.

Consequently, there was no illegal dismissal when Tuppil et al. and Borja et al.’s services were terminated after the contract between LBP Service and Land Bank expired. There was even no need for a notice of termination because they knew exactly when their contracts would end. Contracts of employment for a fixed period terminate on their own at the end of such period. Notably, Tuppil et al. and Borja et al. can still be deployed to other clients. Yet, Tuppil et al. opted not to wait for the reassignments and submitted their resignation letters. (Julian Tungcul Tuppil et al. vs. LBP Service Corp., G.R. 228407, June 10, 2020).