Z was hired in 1985 by LS, Inc. He filed a case on 4 January 1991 for illegal dismissal and regularization against LS, Inc. and SM Corp. before the National Labor Relations Commission.
In its Decision dated 15 December 1994, the Office of the Labor Arbiter ruled that Z was a regular employee of SM Corp., as LS, Inc. was declared to be a labor-only contractor. It was also ruled that Z was illegally dismissed from employment in 1990. Thus, SM Corp. (the true employer) was ordered to reinstate Z to his former position as regular employee, his regular status “effective as of the date of the Office of the Labor Arbiter’s decision.” Z was also awarded backwages.
Should Z’s employment be reckoned from 15 December 1994 (the date of the Office of the Labor Arbiter’s decision), or should it be reckoned from 1985 (the year when Z was hired to work in SM Corp)?
The Supreme Court ruled that Z’s employment started from 1985. This is because service to an employer is presumed continuous unless there is evidence that employer-employee relations were validly severed in the interim. If an employee returns to work upon an order of reinstatement, he or she is not considered a new hire.
Following this principle, the employment relationship between Z and SM Corp. should have been considered as continuous and not validly severed when Z was illegally dismissed from employment. When Z was returned to work upon an order of reinstatement, Z was not a new hire. Thus, the reckoning point of his length of service must be in 1985, or that date when he first started working in SM Corp.
Further reading:
- Cuadra v. San Miguel Corp., G.R. No. 194467, July 13, 2020.
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