In a 12-page ruling, the Supreme Court First Division declared that seasonal employees, including those hired in the agricultural sector under the pakyaw system, are considered by law as regular workers if they continue to perform their jobs for more than one season.

“The fact that an employee is free to make their services available to others does not negate regular employment status for as long as they are hired repeatedly for the same activities and not merely on and off for any single phase of agricultural work,” the SC said in a ruling penned by Associate Justice Ricardo R. Rosario.

The case referred to the 2009 complaints filed by spouses Lucito and Helen Villaruel before the National Labor Relations Commission accusing Hacienda San Isidro, administered by Rey Silos Llamado, of illegal dismissal, underpayment of wages, and non-payment of service incentive leave pay.

The Villaruel couple were sugar farm workers hired by the hacienda, with Helen being employed only as a seasonal worker in the sugar plantation.

The NLRC upheld the termination of Lucito’s employment as just and afforded with due process. It also ruled that Helen is not an employee of the hacienda, thus not entitled to any monetary claim.

The Villaruels brought the case to the Court of Appeals, which in 2013, decided that the NLRC was correct, except that Helen is considered a regular employee and was, in fact, illegally dismissed.

The CA declared that Helen is entitled to back wages, with wage differentials computed from the time her salaries were withheld from her until the date that the decision was handed down.

The appellate court also directed the hacienda owners to grant Helen separation pay equivalent to one month's salary for every year of service. In its petition before the SC Division, the hacienda owners contested the CA ruling as they cited the High Tribunal’s decision on the Mercado Sr. v. NLRC.

Under the said ruling, the SC stressed that Helen’s status is an exception to the general rule where a seasonal employee is considered a regular employee for working for more than one season.

The employers pointed out that such an exception is the fact that Helen is free to contract her services elsewhere, thus she cannot claim the status of a regular seasonal employee.T

According to the petitioners, Helen “worked sparingly in the hacienda on a pakyaw basis” and that she was free to work elsewhere.

However, Helen explained that the petitioners failed to support their claim with evidence, adding that the sample payrolls and worksheets presented by the Hacienda only proved that she has been working as a regular employee of the petitioners for many years. The Court ruled that the CA was correct in declaring Helen a regular employee but not by the reasoning behind its decision.

“We disagree with the ratiocination in arriving at said conclusion and deem it necessary, for the guidance of the bench and the bar, to correct such erroneous reasoning,” the First Division declared.

According to the Court, the CA’s ruling that Helen is a casual employee who may be considered a regular employee based on the provision in the second paragraph of Article 295 of the Labor Code.

Citing jurisprudence, the First Division said that for a seasonal employee to attain regular employment status, he or she must perform work that is seasonable in nature for over one season.

The court slammed the petitioner’s adoption of the Mercado as it pointed out that unlike the workers cited in the said case, Helen “was not hired on and off for any single phase of agricultural work.”

“She was hired repeatedly for the same activities, i.e., sugarcane cultivation, counting patdan, etc. Hence, whether she was free to make her services available to other farm owners is of no relevance here,” said the SC Division. SC magistrates also rejected the petitioner’s claim that being a pakyaw worker, Helen is not subject to their control and thus cannot be payrolled as a regular employee.

Such argument by the Hacienda invites the Court to determine the existence of an employer-employee relationship. However, this cannot be considered by the SC because it will violate the rules under which the petition has been applied.

And even if the SC decides to entertain the petitioner’s reasoning, it will fail to convince the court to reject CA because the pakyaw system “defines not the relationship between the employer and the employee.

“Since Helen performed her tasks at the petitioner’s hacienda, the latter could easily exercise control and supervision over the former. Accordingly, whether petitioners actually exercised this right or power to control is immaterial as the law simply requires the existence of such right and the opportunity to control and supervise.”