Legal Updates

The legal landscape surrounding seasonal workers and the complexities of employer-employee relationships was recently revisited in the case of Hacienda San Isidro / Silos Farms v. Lucito and Helen Villaruel. This case is particularly significant because it highlights the rare occurrence of the Supreme Court reversing itself on a Motion for Reconsideration.

By way of background, Lucito and Helen Villaruel were employed as farm workers at Hacienda San Isidro. They were paid on a pakyaw basis. The Villaruel couple’s tasks primarily involved counting patdan (harvested sugarcane bundles), cultivating sugarcane, and carrying out other manual labor related to sugar farming. Helen, in addition to her farm work, operated a small sari-sari store, and was intermittently hired by the hacienda, a detail that would later become a point of contention in the case. Sps. Villaruel then filed a case for illegal dismissal.

Procedurally, the Labor Arbiter, National Labor Relations Commission (“NLRC”), and Court of Appeals (“CA”) all had flip-flopping rulings as regards the employment status of Sps. Villaruel. For the Labor Arbiter, it ruled that Lucito was dismissed for just cause and Helen was found to be a regular employee and illegally dismissed from her employment. On appeal, the NLRC partially reversed the LA and ruled that Helen was not an employee and is not entitled to her money claims. Upon reconsideration, the NLRC reversed itself and ruled that the Sps. Villaruel were illegally dismissed. In the CA, it reversed the NLRC and ruled that Lucito was justly dismissed and that Helen is not an employee. Upon reconsideration, the CA reversed itself and ruled that Helen is a regular employee and therefore illegally dismissed.

Supreme Court’s Initial Ruling

On 13 November 2023, the Supreme Court took up the case, with the primary issue being whether Lucito and Helen were seasonal employees and, if so, whether they were illegally dismissed.

In its Decision, the Supreme Court established the following requisites for the attainment of regular employment status by a seasonal employee:

1. The seasonal employee performs work or services that are seasonal in nature; and
2. The seasonal employee is employed to perform such work or services for more than one season.

Applying the requisites in this case, the Supreme Court found that Helen performs work that is seasonal in nature and that such cycle is repeated every year. Hacienda argues that the exception in Gapayao, citing Mercado, should apply. In those cases, it was held that when seasonal employees are free to contract their services with other farm owners, then they are not regular employees. However, in this case, the Supreme Court held that Helen was not hired on and off for any single phase of agriculture work, but she was repeatedly hired for the same activities. The Supreme Court then said that “whether she was free to make her services available to other farm owners is of no relevance.”

As regards employer-employee relationship, the Supreme Court ruled that pakyaw is merely an arrangement of payment. As for control, the Supreme Court held that it was immaterial to revisit whether there was indeed control exercised by the Hacienda over its farm workers.

Change of Season Upon Hacienda’s Motion for Reconsideration

The Supreme Court’s Resolution dated 11 August 2025 brings the issue of control into sharp focus. In labor law, one of the key elements in determining the existence of an employer-employee relationship is the element of control: whether the employer exercises control over the manner and means by which the worker performs their tasks. The Supreme Court’s reversal is based on the finding that the Villaruels were not under the necessary level of control to establish an employer-employee relationship.

While the Supreme Court retained its doctrine laid down in the main Decision regarding the requisites for regular seasonal employment, it modified the ruling insofar as the factual finding of existence of the power or right to control. The Court ruled that nothing in the records show that Helen was able to prove by substantial evidence that Hacienda had the power or right to control her work. In justifying its ruling, the Court said that the LA merely held that Helen attained the status of a regular employee, but the length of service and repeated act of assigning tasks do no automatically result in entitlement to the rights and privileges of a regular employee. As for the NLRC’s ruling, it only found that Helen received wages, which is only one prong in the four-fold test. Nonetheless, Article 295 of the Labor Code is not a criterion to determine the existence of an employer-employee relationship. In ending, the Supreme Court held that the fact that Helen worked at the farm does not automatically mean that it controlled or reserved the right to control the means and methods by which the result of her work is to be accomplished. Thus, the earlier Decision was reversed.

Key Takeaways

A key takeaway from the Supreme Court’s reversal in this case lies in the allocation of the burden of proof. In labor cases, while the law traditionally tilts in favor of labor in light of the State’s policy of protecting workers, this policy does not relieve the claimant of the burden to first establish, by substantial evidence, that an employer-employee relationship exists.

The Supreme Court emphasized that the burden of proving the existence of such a relationship rests upon the worker who asserts it. The rationale is straightforward: before a claim of illegal dismissal or entitlement to labor benefits can be entertained, the complainant must first establish that they are indeed an employee. Without proof of this foundational element, the Court cannot apply the protective mantle of labor law.

In addition, the Court’s pronouncement reinforces that while seasonal workers may be deemed “regular” for the duration of the season, this presumption still hinges on the existence of the four elements of employment, particularly the element of control.

For seasonal workers and employers alike, this case serves as a clarifying precedent:

• For workers, it underscores the importance of substantiating claims with concrete evidence of control and supervision.
• For employers, it reinforces the need to clearly delineate the nature of work arrangements to avoid unintended liabilities.

In the end, as the seasons change, so too does the jurisprudence, reminding us that while labor is favored in law, proof remains the compass of justice.