ROY D. PASOS vs.
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION sign another contract for one (1) year until such time that they were told not to report to
G.R. No. 192394, 3 July 2013
FACTS:
Based on the PNCC’s “Personnel Action Form Appointment for Project Employment”, pe
titioner was designated as “Clerk II (Accounting)” and was assigned to the “NAIA –
II Project.” However, his employment did not end on the expiration but was extended u
ntil for more than two years. He was rehired, his employment was extended, rehired, an
d finally, his project employment was terminated. However, his superior required him still
to report. Upon the medical examination, he was required by the doctor to take sick lea
ve which he did. Upon his return after 74 days, he was informed that he was already dis
missed.
ISSUE:
Whether or not employer’s failure to file termination reports after every project completi
on constitutes the regularity of the project employee.
RULING: Yes. Duration of project employment should be determined at the time of hiring
. While for first three months, petitioner can be considered a project employee of PNCC,
his employment thereafter, when his services were extended without any specification
of as to the duration, made him a regular employee of PNCC. And his status as a regula
r employee was not affected by the fact that he was assigned to several other projects
and there were intervals in between said projects since he enjoys security of tenure.
Moreover, failure of an employer to file termination reports after every project completio
n proves that an employee is not a project employee. Records clearly showed that PN
CC did not report the termination of petitioner’s supposed project employment for the
NAIA II Project to the DOLE. Department Order No. 19, or the “Guidelines Governing the
Employment of Workers in the Construction Industry,” requires employers to submit a rep
ort of an employee’s termination to the nearest public employment office every time an
employee’s employment is terminated due to a completion of a project. PNCC submitt
ed as evidence of its compliance with the requirement supposed photocopies of its ter
mination reports, each listing petitioner as among the employees affected. Unfortunatel
y, none of the reports submitted pertain to the NAIA II Project. Moreover, DOLE NCR verif
ied that petitioner is not included in the list of affected workers based on the termination
reports filed by PNCC. This certification from DOLE was not refuted by PNCC.
With regard his dismissal, a regular employee dismissed for a cause other than the just or
authorized causes provided by law is illegally dismissed. Petitioner’s regular employment
was terminated by PNCC due to contract expiration or project completion, which are
both not among the just or authorized causes provided in the Labor Code, as amended
, for dismissing a regular employee. Thus, petitioner was illegally dismissed and accordin
g to Article 279 of the Labor Code, he is entitled to reinstatement, full back wages, inclus
ive of allowances, and to his other benefits or their monetary equivalent from the time hi
s compensation was withheld from him up to the time of his actual reinstatement.
MACARTHUR MALICDEM AND HERMENIGILDO FLORES,Petitioners,v.MARULAS INDUSTRIAL
CORPORATION AND MIKE MANCILLA,Respondents.
MENDOZA, J.:
FACTS:
Petitioners Malicdem and Flores were hired by respondent corporation as extruder
operators in 2006 They were responsible for the bagging of filament yarn, the quality of
pp yarn package and the cleanliness of the work place area. Their employment
contracts were for a period of one (1) year. Every year thereafter, they would sign a
Resignation/Quitclaim in favor of Marulas a day after their contracts ended, and then
work anymore. They were asked to sign a paper acknowledging the completion of their
contractual status. Claiming that they were illegally dismissed, the corporation
countered that their contracts showed that they were fixedterm employees for a
specific undertaking which was to work on a particular order of a customer for a
specific period. Their severance from employment then was due to the expiration of
their contracts.
ISSUE: Whether or not petitioners were illegally dismissed
HELD: Yes. CA affirming NLRC decision annulled and set aside
Labor Law: Effect of continuous re-hiring of a project employee for the same tasks that
are vital, necessary and indispensable to the usual trade or business of the employer
Once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for the same tasks or nature of tasks; and
(2) these tasks are vital, necessary and indispensable to the usual business or trade of
the employer, then the employee must be deemed a regular employee, pursuant to
Article 280 of the Labor Code and jurisprudence. To rule otherwise would allow
circumvention of labor laws in industries not falling within the ambit of Policy Instruction
No. 20/Department Order No. 19, hence allowing the prevention of acquisition of
tenurial security by project or work pool employees who have already gained the status
of regular employees by the employers conduct.
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. 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.
It is clear then that there was deliberate intent on the part of the employer to prevent
the regularization of petitioners. To begin with, there is no actual project. The only
stipulations in the contracts were the dates of their effectivity, the duties and
responsibilities of the petitioners as extruder operators, the rights and obligations of the
parties, and the petitioners compensation and allowances. As there was no specific
project or undertaking to speak of, the respondents cannot invoke the exception in
Article 280 of the Labor Code.This is a clear attempt to frustrate the regularization of the
petitioners and to circumvent the law.
Even granting that petitioners were project employees, they can still be considered as
regular as they were continuously hired by the same employer for the same position as
extruder operators. Being responsible for the operation of machines that produced
sacks, their work was vital and indispensable the business of the employer.
The respondents cannot use the alleged expiration of the employment contracts of the
petitioners as a shield of their illegal acts. The project employment contracts that the
petitioners were made to sign every year since the start of their employment were only
a stratagem to violate their security of tenure in the company.
The respondents invocation ofWilliam Uy Construction Corp. v. Trinidad22is misplaced
because it is applicable only in cases involving the tenure of project employees in the
construction industry. It is widely known that in the construction industry, a project
employees work depends on the availability of projects, necessarily the duration of his
employment. It is not permanent but coterminous with the work to which he is
assigned.It would be extremely burdensome for the employer, who depends on the
availability of projects, to carry him as a permanent employee and pay him wages
even if there are no projects for him to work on.The rationale behind this is that once the
project is completed it would be unjust to require the employer to maintain these
employees in their payroll.
Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.
PRICE VS INNODATA
Fixed-Term Employment Contract
Posted on January 25, 2010January 26, 2010 by attycortes
What is a fixed-term employment contract and when is it considered valid? The
Supreme Court had occasion to tackle these questions in the case of Cherry J. Price, et
al. versus INNODATA Phils. Inc., et al., (G.R. No. 178505), promulgated on September 30,
2008.
Cherry, Stephanie and Lolita were employed as formatters by INNODATA a domestic
corporation engaged in the data encoding and data conversion business. The parties
executed an employment contract denominated as a “Contract of Employment for a
Fixed Period,” stipulating that the contract shall be for a period of one year.
The days passed by and soon Cherry and her companions found themselves separated
from work due to the end of their contract. Cherry and her companions decided to
contest the validity of said contract by filing a case for illegal dismissal. The case
eventually reached the Supreme Court.
In the course of deciding the case the Court cited Art. 280 of the Labor Code which
states, “The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed
regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer…” According the
Court:
“The employment status of a person is defined and prescribed by law and not by what
the parties say it should be. Equally important to consider is that a contract of
employment is impressed with public interest such that labor contracts must yield to the
common good. Thus, provisions of applicable statutes are deemed written into the
contract, and the parties are not at liberty to insulate themselves and their relationships
from the impact of labor laws and regulations by simply contracting with each other.”
It went on to say that, “Under Article 280 of the Labor Code the applicable test to
determine whether an employment should be considered regular or non-regular is the
reasonable connection between the particular activity performed by the employee in
relation to the usual business or trade of the employer.”
However, the High Court also pointed out that employment which requires
performance of usual and desirable functions, and does not exceed one year, does not
always result in regular employment. This is where the concept of fixed-term
employment comes in:
“Under the Civil Code, fixed-term employment contracts are not limited, as they are
under the present Labor Code, to those by nature seasonal or for specific projects with
predetermined dates of completion; they also include those to which the parties by free
choice have assigned a specific date of termination….The decisive determinant in term
employment is the day certain agreed upon by the parties for the commencement and
termination of their employment relationship, a day certain being understood to be that
which much necessarily come, although it may not be known when.”
Does this mean that fixed-term employment contracts are always valid, provided they
are entered into knowingly and voluntarily? No. In the case under consideration the
Supreme Court emphasized that fixed-term employment contracts are the exception
rather than the general rule, and are valid only under certain circumstances. Citing its
earlier decision in Brent School v. Zamora (G.R. No. 48494, 5 February 1990, 181 SCRA
702) the Court identified several circumstances wherein a fixed-term is an essential and
natural appurtenance:
“Some familiar examples may be cited of employment contracts which may be neither
for seasonal work nor for specific projects, but to which a fixed term is an essential and
natural appurtenance: overseas employment contracts, for one, to which, whatever
the nature of the engagement, the concept of regular employment with all that it
implies does not appear ever to have been applied, Article 280 of the Labor Code
notwithstanding; also appointments to the positions of dean, assistant dean, college
secretary, principal, and other administrative offices in educational institutions, which
are by practice or tradition rotated among the faculty members, and where fixed terms
are a necessity without which no reasonable rotation would be possible. Similarly,
despite the provisions of Article 280, Policy Instructions No. 8 of the Minister of Labor
implicitly recognize that certain company officials may be elected for what would
amount to fixed periods, at the expiration of which they would have to stand down, in
providing that these officials, “x x may lose their jobs as president, executive vice-
president or vice president, etc. because the stockholders or the board of directors for
one reason or another did not reelect them.”
The Court also mentioned the fact that in the same Brent case, it issued “a stern
admonition that where, from the circumstances, it is apparent that the period was
imposed to preclude the acquisition of tenurial security by the employee, then it should
be struck down as being contrary to law, morals, good customs, public order and public
policy.”
To end the long story: Cherry and her companions were considered by the Court as
regular employees; and as far as their fixed-term employment contract was concerned,
the Court had this to say:
“After considering petitioners’ contracts in their entirety, as well as the circumstances
surrounding petitioners’ employment at INNODATA, the Court is convinced that the
terms fixed therein were meant only to circumvent petitioners’ right to security of tenure
and are, therefore, invalid.”
Millennium Erectors Corporation, Petitioner, v. Virgilio Magallanes, Respondent
Carpio-Morales, J.:
FACTS:
Magallanes is a utility man working for Tiu, the CEO of Respondent. In July 2004, he was
dismissed because of old age, which prompted him to file an illegal dismissal complaint
before the Labour Arbiter. Petitioner filed a position paper arguing that respondent was
a project employee whom it hired for a building project in Libis on January 30, 2003, to
prove which it submitted the employment contract signed by him;that on August 3,
2004, respondents services were terminated as the project was nearing completion;and
he was given financial assistance in the amount ofP2,000, for which he signed a
quitclaim and waiver.
The Labour Arbiter ruled in favour of petitioner, holding that respondent knew of his
status as project employee, and that the project was completed. On appeal to the
NLRC, it held that Respondent was a regular employee, and because of the payrolls, it is
evident that Respondent was employed for 16 years. The NLRC thus concluded that
while respondents work as a utility man may not have been necessary or desirable in
the usual business of petitioner as a construction company, that he performed the same
functions continuously for 16 years converted an otherwise casual employment to
regular employment, hence, his termination without just or authorized cause amounted
to illegal dismissal.
Petitioner filed an MR which was denied, alleging that motion for reconsideration which
it treated as an appeal was not perfected, it having been belatedly filed. The CA
affirmed this stance, on appeal by Petitioner.
The petitioners file a petition for review on certiorari.
ISSUE:
1. Whether or not the dismissal of the Labour Arbiter has become final and executor
because of the failure of the requirements for the perfection of appeal
HELD:
No. Petition fails.
Labor Law: Procedural Rules and Technicalities
In labor cases, rules of procedure should not be applied in a very rigid and technical
sense.They are merely tools designed to facilitate the attainment of justice, and where
their strict application would result in the frustration rather than promotion of substantial
justice, technicalities must be avoided.
The requirement regarding verification of a pleading is formal, not jurisdictional. Such
requirement is simply a condition affecting the form of pleading, the non-compliance of
which does not necessarily render the pleading fatally defective.
As for the requirement on proof of service, it may also be dispensed with since in
appeals in labor cases, non-service of copy of the appeal or appeal memorandum to
the adverse party is not a jurisdictional defect which calls for the dismissal of the appeal.
Labor Law: Project employees
The repeated and continuing need for respondent's services is sufficient evidence of the
necessity, if not indispensability, of services to petitioner's business and, as a regular
employee, he could only be dismissed from employment for a just or authorized cause.
G.R.No. 159343 September 28, 2007
PEDY CASERES and ANDITO PAEL, Petitioners,
vs.
UNIVERSAL ROBINA SUGAR MILLING CORPORATION (URSUMCO) and/or RESIDENT
MANAGER RENE CABATE, Respondents.
FACTS: Universal Robina Sugar Milling Corporation (respondent) is a corporation
engaged in the cane sugar milling business. Petitioners were employees.
At the start of their respective employments, they were made to sign a Contract of
Employment for Specific Project or Undertaking. Petitioners’ contracts were renewed
from time to time, until May 1999 when they were informed that their contracts will not
be renewed anymore.
Petitioners filed a complaint for illegal dismissal, regularization, incentive leave pay, 13th
month pay, damages and attorney’s fees.
LABOR ARBITER: They were not regular employees
NLRC and CA: affirmed
ISSUE: WON they are regular employees
HELD: They are NOT regular employees
ART. 280. Regular and Casual Employees. – The provision of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season. An
employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment shall
continue while such actually exists.
The principal test for determining whether an employee is a project employee or a
regular employee is whether the employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined at the time
of the engagement of the employee.
A true project employee should be assigned to a project which begins and ends at
determined or determinable times, and be informed thereof at the time of hiring.
The very nature of the terms and conditions of complainants’ hiring reveals that they
were required to perform phases of special projects for a definite period after, their
services are available to other farm owners. This is so because the planting of sugar
does not entail a whole year operation, and utility works are comparatively small during
the off-milling season.
It must be noted that there were intervals in petitioners’ respective employment
contracts, and that their work depended on the availability of such contracts or
projects. Consequently, the employment of URSUMCO’s work force was not permanent
but co-terminous with the projects to which the employees were assigned and from
whose payrolls they were paid
The fact that petitioners were constantly re-hired does not ipso facto establish that they
became regular employees. Their respective contracts with respondent show that there
were intervals in their employment. In petitioner Caseres’s case, while his employment
lasted from August 1989 to May 1999, the duration of his employment ranged from one
day to several months at a time, and such successive employments were not
continuous. With regard to petitioner Pael, his employment never lasted for more than a
month at a time. These support the conclusion that they were indeed project
employees, and since their work depended on the availability of such contracts or
projects, necessarily the employment of respondent’s work force was not permanent
but co-terminous with the projects to which they were assigned and from whose payrolls
they were paid.

Moreover, even if petitioners were repeatedly and successively re-hired, still it did not
qualify them as regular employees, as length of service is not the controlling
determinant of the employment tenure of a project employee, but whether the
employment has been fixed for a specific project or undertaking, its completion has
been determined at the time of the engagement of the employee. Further, the proviso
in Article 280, stating that an employee who has rendered service for at least one (1)
year shall be considered a regular employee, pertains to casual employees and not to
project employees