Petitioners Pedrito R. Parayday and Jaime Reboso alleged that they were employed sometime in October 1996 and March 1997, respectively, as fitters/welders by Oceanview/VRC Lighterage Co. Inc. and VRC/Oceanview Shipbuilders Co. Inc. Their duties and responsibilities included, among others, assembling, welding, fitting and installing materials or components using electrical welding equipment, and/or repairing and securing parts and assemblies.
Sometime in 2003, Oceanview changed its corporate name to “Shogun Ships Inc.,” herein respondent, which maintained the same line of business and retained in its employ petitioners. The management of Shogun Ships Inc., verbally dismissed them from service effective May 1, 2008 due to lack of work as fitters and welders. Thus, they filed a complaint for illegal dismissal, regularization and money claims.
Upon the other hand, respondent Shogun denied petitioners were its regular employees. It alleged that its regular employees occasionally called in their friends and nearby neighbors such as petitioners who were seeking temporary work as helpers until such time the needed repairs on its barges were carried out or completed. They were not however engaged on a regular basis since their work on the barges was merely temporary or occasional. It already had in its employ regular employees for its technical, mechanical, and electrical needs. Concomitantly, helpers were free to seek employment elsewhere at any given time.
Is there merit to this defense?
Ruling: No.
Article 295 of the Labor Code “provides for two types of regular employees, namely: (a) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer (first category); and (b) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed (second category).”
The regular employment status of a person is defined and prescribed by law and not by what the parties say it should be. Thus, while respondent was of the belief that rendering occasional work for Shogun Ships prevented the parties from creating an employment relationship, much more for petitioners from attaining regular employment status, provision of law, however, dictates that they were regular employees of Shogun Ships.
First, the records of the case are bereft of evidence that petitioners were duly informed of the nature and status of their engagement with Shogun Ships. Notably, in the absence of a clear agreement or contract, whether written or otherwise, which would clearly show that petitioners were properly informed of their employment status with Shogun Ships, petitioners enjoy the presumption of regular employment in their favor.
Second, petitioners were performing activities which are usually necessary or desirable in the business or trade of Shogun Ships. This connection can be determined by considering the nature of the work performed by petitioners and its relation to the scheme of the particular business or trade of Shogun Ships in its entirety.
As Shogun Ships is engaged in the business of domestic cargo shipping, it is essential, if at all necessary, that Shogun Ships must continuously conduct vital repairs for the proper maintenance of its barges. The desirability of petitioners’ functions is bolstered by the fact that Shogun Ships itself precisely retained in its employ regular employees whose duties and responsibilities included, among others, performing necessary repair and maintenance work on the barges.
Third, irrespective of whether petitioners’ duties or functions are usually necessary and desirable in the usual trade or business of Shogun Ships, the fact alone that petitioners were allowed to work for it for a period of more than one year, albeit intermittently since May 2006 until they were dismissed from employment on May 1, 2008, was indicative of the regularity and necessity of welding activities to its business. As such, their employment is deemed to be regular with respect to such activities and while such activities exist. (Pedrito R. Parayday and Jaime Reboso vs. Shogun Shipping Co. Inc., G.R. 204555, July 6, 2020).