Poseidon Fishing vs.

National Labor Relations Commission

G.R. No. 168052, February 20, 2006
CHICO-NAZARIO, J.
CASE #46
__________________________________________________________
Petitioner: POSEIDON FISHING/TERRY DE JESUS
Respondents: NATIONAL LABOR RELATIONS COMMISSION and JIMMY S.
ESTOQUIA
Doctrine: The test to determine whether employment is regular or not is the reasonable
connection between the particular activity performed by the employee in relation to the usual
business or trade of the employer. And, if the employee has been performing the job for at least
one year, even if the performance is not continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as sufficient evidence of the necessity, if not
indispensability of that activity to the business.

FACTS:
1. Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing industry. Its
various vessels catch fish in the outlying islands of the Philippines, which are traded and sold at
the Navotas Fish Port.
2. One of its boat crew was private respondent Jimmy S. Estoquia while petitioner Terry de
Jesus is the manager of petitioner company.
3. Private respondent was employed by Poseidon Fishing in 1988 as Chief Mate. After five
years, he was promoted to Boat Captain.
4. In 1999, petitioners, without reason, demoted respondent from Boat Captain to Radio
Operator of petitioner Poseidon. As a Radio Operator, he monitored the daily activities in their
office and recorded in the duty logbook the names of the callers and time of their calls. On 3
July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks. However,
he was able to record the same in the other logbook. Consequently, when he reviewed the two
logbooks, he noticed that he was not able to record the said call in one of the logbooks so he
immediately recorded the 7:25 a.m. call after the 7:30 a.m. entry.
5. Then later on, around 9:00 o’clock in the morning of 4 July 2000, petitioner Terry de Jesus
detected the error in the entry in the logbook. Subsequently, she asked private respondent to
prepare an incident report to explain the reason for the said oversight.
6. At around 2:00 o’clock in the afternoon of that same day, petitioner Poseidon’s secretary,
namely Nenita Laderas, summoned private respondent to get his separation pay amounting to
P55,000. However, he refused to accept the amount as he believed that he did nothing illegal to
warrant his immediate discharge from work
7. Private respondent filed a complaint for illegal dismissal with the Labor Arbiter, alleging
nonpayment of wages with prayer for back wages, damages, attorney’s fees, and other
monetary benefits.
8. Labor Arbiter decided in favor of private respondent. NLRC affirmed the decision of the
Labor Arbiter. Petitioners filed a Petition for Certiorari with the Court of Appeals, imputing
grave abuse of discretion, but the Court of Appeals found none and denied the petition.
ISSUE: Whether or not the private respondent was a regular employee at the time his
employment was terminated
HELD:
1. The Court held that yes, the private respondent was a regular employee at the time his
employment was terminated.
In arriving in this conclusion and in relation to our topic, the Court in this case, discussed
the Article 280 of the Labor Code. This provision draws a line between regular and casual
employment. The provision enumerates two (2) kinds of employees, the regular employees
and the casual employees. The regular employees consist the following:
1) Those engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; and
2) Those who have rendered at least one (1) year of service whether such service is
continuous or broken.
In the present case, the Court applied the 2 test in determining whether an employee is a
regular employee.
In a span of 12 years, private respondent worked for petitioner company first as a Chief Mate,
then Boat Captain, and later as Radio Operator. While the petitioner interprets this as act of
“hiring and re-hiring” and that respondent has a contractual status saying that for every
engagement, a fresh contract was entered into by the parties at the outset as the conditions of
employment changed when the private respondent filled a different position, the Court on the
other hand, held that the act of “hiring and re-hiring” in various capacities is a mere gambit
employed by petitioner company to thwart prevent the tenurial protection of private
respondent. Such pattern of re-hiring and the recurring need for his services are testament
to the necessity and indispensability of such services to petitioners’ business or trade.

Moreover, his job was directly related to the deep-sea fishing business of petitioner Poseidon.
His work was, therefore, necessary and important to the business of his employer. Such being
the scenario involved, private respondent is considered a regular employee of petitioner under
Article 280 of the Labor Code.

2. Moreover, the terms of employment of private respondent as provided in the Kasunduan was
not only vague, it also failed to provide an actual or specific date or period for the contract.
3. Furthermore, as petitioners themselves admitted in their petition before this Court, private
respondent was repeatedly hired as part of the boat’s crew and he acted in various capacities
onboard the vessel. In Integrated Contractor and Plumbing Works, Inc. v. National
Labor Relations Commission, we held that the test to determine whether employment is
regular or not is the reasonable connection between the particular activity performed
by the employee in relation to the usual business or trade of the employer. And, if the
employee has been performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability of that
activity to the business.
4. The act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner
to thwart the tenurial protection of private respondent. Such pattern of re-hiring and the
recurring need for his services are testament to the necessity and indispensability of such
services to petitioners’ business or trade.
5. The principal test for determining whether particular employees are “project employees” as
distinguished from “regular employees,” is whether or not the “project employees” were
assigned to carry out a “specific project or undertaking,” the duration and scope of
which were specified at the time the employees were engaged for that project. In this
case, petitioners have not shown that private respondent was informed that he will be assigned
to a “specific project or undertaking.” As earlier noted, neither has it been established that he
was informed of the duration and scope of such project or undertaking at the time of their
engagement.

DISPOSITIVE: WHEREFORE, the present petition is hereby DENIED. The Decision of the
Court of Appeals dated 14 March 2005 in CA-G.R. SP No. 81140 is hereby AFFIRMED WITH
MODIFICATION.
The Supreme Court's decision in Poseidon Fishing v. NLRC (20 February 2006) revolves
around the correct classification of employment under Article 280 of the Labor Code, and
whether the respondent (an employee of Poseidon Fishing) was a regular employee at the
time of his termination — or merely a fixed-term or seasonal/project employee, as the
employer claimed.