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Hiring Extend Period HELD:

AUDION ELECTRIC CO. INC, v NLRC The Court held NO. There is no grave abuse of discretion committed by NLRC in finding that
private respondent was not a project employee.
GR No. 106648
We have held that where the employment of project employees is extended long after the
FACTS: supposed project has been finished, the employees are removed from the scope of project
employees and considered regular employees. Private respondent had presented substantial
evidence to support his position, while petitioner merely presented an unverified position paper
In this special civil action for certiorari, petitioner seeks the annulment of the resolution 1 dated merely stating therein that private respondent has no cause to complain since the employment
March 24, 1992, of the National Labor Relations Commission in NLRC NCR-CA No. 001034-90 contract signed by private respondent with petitioner was co-terminus with the project. Notably,
and the Order 2 dated July 31, 1992, denying petitioner's motion for reconsideration dated April petitioner failed to present such employment contract for a specific project signed by private
22, 1992. respondent that would show that his employment with the petitioner was for the duration of a
particular project. Moreover, notwithstanding petitioner's claim in its reply that in taking interest
The facts of the case as summarized by Labor Arbiter Cresencio R. Iniego in his decision in the welfare of its workers, petitioner would strive to provide them with more continuous work
rendered on November 15, 1990 in NLRC-NCR Case No. -00-08-03906-89, and which are by successively employing its workers, in this case, private respondent, petitioner failed to
quoted in the questioned Resolution dated March 24, 1992 of the public respondent are as present any report of termination. Petitioner should have submitted or failed as many reports of
follows: termination as were construction projects actually finished, considering that private respondent
had been hired since 1976. The failure of petitioner to submit reports of termination supports the
From the position paper and affidavit corroborated by oral testimony, it appears that complainant claim of private respondent that he was indeed a regular employee.
was employed by respondent Audion Electric Company on June 30, 1976 as fabricator and
continuously rendered service assigned in different offices or projects as helper electrician, Policy Instruction No. 20 of the Department of Labor is explicit that employers of project
stockman and timekeeper. He as rendered thirteen (13) years of continuous, loyal and dedicated employees are exempted from the clearance requirement but not from the submission of
service with a clean record. On August 3, complainant was surprised to receive a letter informing termination report. This court has consistently held that failure of the employer to file termination
him that he will be considered terminated after the turnover of materials, including respondents, reports after every project completion with the nearest public employment office is an indication
tools and equipment not later than August 15, 1989. that private respondent was not and is not a project employee. Department Order No. 19
superseding Policy Instruction No. 20 expressly provides that the report of termination is one of
the indications of project employment.
Complainant claims that he was dismissed without justifiable cause and due process and that
his dismissed was done in bad faith which renders the dismissal illegal. For this reason, he As stated earlier, the rule in our jurisdiction is that findings of facts of the NLRC affirming those
claims that he is entitled to reinstatement with full backwages. He also claims that he is entitled of the Labor Arbiter are entitled to great weight and will not be disturbed if they are supported by
to moral and exemplary damages. He includes payment of his overtime pay, project allowance, substantial evidence. Substantial evidence is an amount of relevant evidence which a
minimum wage increase adjustment, proportionate 13th month pay and attorney's fees. On reasonable mind might accept as adequate to justify a conclusion.
November 15, 1990, Labor Arbiter Cresencio R. Iniego rendered a decision in favor of the claims
of the complainant, Nicolas Madolid. Petitioner appealed to the National Labor Relations WHEREFORE, the challenged resolutions of the respondent NLRC are hereby AFFIRMED with
Commission which rendered the questioned Resolution dated March 24, 1992 dismissing the the MODIFICATION that the awards of moral and exemplary damages and attorney's fees are
appeal. The motion for reconsideration filed by petitioner was denied by the NLRC in its Order
dated July 31, 1992. Hence, this petition.

ISSUE: Whether the respondent NLRC committed grave abuse of discretion amounting to lack
or excess of jurisdiction when it ruled that private respondent (Nicolas Madolid) was a regular
employee and not a project employee.


G.R. NO. 86408 FACTS:

FACTS: The individual respondents were hired by the petitioner company on various dates from 1991 to
1993 to work at its duck farm in Laguna. The respondents were hired under an employment
The petitioner hired the private respondent as clerk typist III effective December 15, 1986 until contract which provided for a five-month period. After the expiration of the said employment
January 16, 1987, and was subsequently rehired on January 16, 1987 up to February 15, 1987. contracts, the petitioner company would renew them and re-employ the respondents. This
On February 15, 1987, it gave her another extension up to March 15, 1987. On March 15, 1987, practice continued until sometime in 1996, when the petitioners informed the respondents that
it gave her a further extension until April 30, 1987. On May 1, 1987, she was given until May 31, they were no longer renewing their employment contracts.
1987. On June 1, 1987, she was given up to June 30, 1987. Her appointments were covered by
corresponding written contracts. On June 22, 1987, her services were terminated without notice Respondents filed separate complaints for illegal dismissal, reinstatement, backwages,
or investigation. On the same day, she went to the labor arbiter on a complaint for illegal damages and attorneys fees against the petitioners.
dismissal. As the court has indicated, both the labor arbiter and the respondent National 4 Labor
Relations Commission ruled for her. The petitioner argues mainly that the private respondent's The petitioners submit that the respondents are not regular employees. They aver that it is of no
appointment was temporary and hence she may be terminated at will. moment that the respondents have rendered service for more than a year since they were
covered by the five-month individual contracts to which they duly acquiesced. The petitioners
ISSUE: contend that they were free to terminate the services of the respondents at the expiration of their
individual contracts. The petitioners maintain that, in doing so, they merely implemented the
Whether or not private respondent is temporary employee? terms of the contracts.


The Court held NO. The private respondent was to all intents and purposes, and at the very Whether or not respondents are regular employees of petitioner company.
least, a probationary employee, who became regular upon the expiration of six months. Under
Article 281 of the Labor Code, a probationary employee is "considered a regular employee" if he HELD:
has been "allowed to work after the probationary period." The fact that her employment has been
a contract-to- contract basis cannot alter the character of employment, because contracts cannot The Court held PARTIALLY IN FAVOR of the respondents. The primary standard, therefore, of
override the mandate of law. Hence, by operation of law, she has become a regular employee. determining regular employment is the reasonable connection between the particular activity
In the case at bar, the private employee was employed from December15, 1986 until June 22, performed by the employee in relation to the usual trade or business of the employer. The test
1987 when she was ordered laid off. Her tenure having exceeded six months, she attained is whether the former is usually necessary or desirable in the usual business or trade of the
regular employment. employer.

WHEREFORE, the petition is DISMISSED. The private respondent is ordered REINSTATED The connection can be determined by considering the nature of work performed and its relation
with backwages equivalent to three years with no qualification or deductions. to the scheme of the particular business or trade in its entirety. Also, if the employee has been
performing the job for at least a year, even if the performance is not continuous and merely
intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while such activity Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The private
exists. respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA
PRODUCTIONS, INC. and that it was primarily engaged in the distribution & exhibition of
Thus, we quote with approval the following excerpt from the decision of the CA: movies- but not then making of movies; (b) That they hire contractors called “producers” who act
as independent contractors as that of Vic Del Rosario; and (c) As such, there is no employee-
employer relation between petitioners and private respondents.
It is obvious that the said five-month contract of employment was used by petitioners as a
convenient subterfuge to prevent private respondents from becoming regular employees. Such
contractual arrangement should be struck down or disregarded as contrary to public policy or The Labor Arbiter held that the complainants are employees of the private respondents. That
morals. To uphold the same would, in effect, permit petitioners to avoid hiring permanent or the producers are not independent contractor but should be considered as labor-only contractors
regular employees by simply hiring them on a temporary or casual basis, thereby violating the and as such act as mere agent of the real employer. Thus, the said employees are illegally
employees’ security of tenure in their jobs. dismissed.

Petitioners’ act of repeatedly and continuously hiring private respondents in a span of … 3 to 5 The private respondents appealed to the NLRC which reversed the decision of the Labor Arbiter
years to do the same kind of work negates their contention that private respondents were hired declaring that the complainants were project employees due to the ff. reasons: (a) Complainants
for a specific project or undertaking only. Further, factual findings of labor officials who are were hired for specific movie projects and their employment was co-terminus with each movie
deemed to have acquired expertise in matters within their respective jurisdiction are generally project; (b)The work is dependent on the availability of projects. As a result, the total working
accorded not only respect but even finality, and bind us when supported by substantial evidence. hours logged extremely varied; (c) The extremely irregular working days and hours of
complainant’s work explains the lump sum payment for their service; and (d) The respondents
alleged that the complainants are not prohibited from working with other movie companies
WHEREFORE, premises considered, the petition is DENIED DUE COURSE. The Decision of whenever they are not working for the independent movie producers engaged by the
the Court of Appeals is AFFIRMED. respondents.

Length of Time A motion for reconsideration was filed by the complainants but was denied by NLRC. In effect,
they filed an instant petition claiming that NLRC committed a grave abuse of discretion in: (a)
ALEJANDRO MARAGUINOT, JR. AND PAUILINO ENERO v. NLRC, VIC DEL ROSARIO, Finding that petitioners were project employees; (b) Ruling that petitioners were not illegally
VIVA FILMS dismissed; and (c) Reversing the decision of the Labor Arbiter.

GR No. 120969 In the instant case, the petitioners allege that the NLRC acted in total disregard of evidence
material or decisive of the controversy.
Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part of the
filming crew. Sometime in May 1992, sought the assistance of their supervisor to facilitate their (a) W/N there exist an employee- employer relationship between the petitioners and the private
request that their salary be adjusted in accordance with the minimum wage law. respondents.

On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would agree to (b) W/N the private respondents are engaged in the business of making movies.
their request only if they sign a blank employment contract. Petitioners refused to sign such
document. After which, the Mr. Enero was forced to go on leave on the same month and refused (c) W/N the producer is a job contractor.
to take him back when he reported for work. Mr. Maraguinot on the other hand was dropped
from the payroll but was returned days after. He was again asked to sign a blank employment
contract but when he refused, he was terminated.
HELD: No pronouncement as to costs.

There exist an employee- employer relationship between the petitioners and the private ABESCO CONSTRUCTION VS. RAMIREZ,
respondents because of the ff. reasons that nowhere in the appointment slip does it appear that
it was the producer who hired the crew members. Moreover, it was VIVA’s corporate name G.R. NO. 141168
appearing on heading of the slip. It can likewise be said that it was VIVA who paid for the
petitioners’ salaries.
Respondents also admit that the petitioners were part of a work pool wherein they attained the
status of regular employees because of the ff. requisites: (a) There is a continuous rehiring of Petitioner company was engaged in a construction business where respondents were hired on
project employees even after cessation of a project; (b) The tasks performed by the alleged different dates from 1976 to 1992 either as laborers, road roller operators, painters or drivers.
“project employees” are vital, necessary and indispensable to the usual business or trade of the Respondents filed two separate complaints for illegal dismissal against the company and its
employer; and (c) However, the length of time which the employees are continually re-hired is General Manager before Labor Arbiter. The complaints included claims for non-payment of 13th
not controlling but merely serves as a badge of regular employment. month pay, 5-days’ service incentive leave pay, premium pay for holidays, rest days, and moral
and exemplary damages. Petitioners alleged that respondents were only project employees
whose employment was coterminous with the project they are assigned. They were not regular
Since the producer and the crew members are employees of VIVA and that these employees’ employees, who would enjoy security of tenure and entitlement of separation pay. LA declared
works deal with the making of movies. It can be said that VIVA is engaged of making movies judgment declaring respondents as regular employees belonged to a “workpool” and where hired
and not on the mere distribution of such. and rehired over a period of 18 years and petitioners are guilty of illegal dismissal. Petitioner
appealed to NLRC which affirmed LA’s decision. Petitioner then file petition for review to CA
The producer is not a job contractor because of the ff. reasons: (Sec. Rule VII, Book III of the alleging that they were not guilty of illegal dismissal since respondents’ services were merely put
Omnibus Rules Implementing the Labor Code.) on hold until the resumption of their business operations. CA dismissed the petition for petitioner
is barred from raising a new defense at this stage of the case.
a. A contractor carries on an independent business and undertakes the contract work on his own
account under his own responsibility according to his own manner and method, free from the ISSUE:
control and direction of his employer or principal in all matters connected with the performance
of the work except as to the results thereof. The said producer has a fix time frame and budget Whether or not respondents are project employees or regular employees.
to make the movies.
b. The contractor should have substantial capital and materials necessary to conduct his
business. The said producer, Del Rosario, does not have his own tools, equipment, machinery,
work premises and other materials to make motion pictures. Such materials were provided by The Court held YES. The respondents were regular employees. However, we take exception to
VIVA. the reasons cited by the LA (which both the NLRC and the CA affirmed) in considering
respondents as regular employees and not as project employees.
It can be said that the producers are labor-only contractors. Under Article 106 of the Labor Code
(reworded) where the contractor does not have the requisites as that of the job contractors. Contrary to the disquisitions of the LA, employees (like respondents) who work under different
project employment contracts for several years do not automatically become regular employees;
they can remain as project employees regardless of the number of years they work. Length of
WHEREFORE, the instant petition is GRANTED. The assailed decision of the National Labor service is not a controlling factor in determining the nature of ones employment.
Relations Commission in NLRC NCR CA No. 006195-94 dated 01 February 1995, as well as its
Resolution dated 6 April 1995, are hereby ANNULLED and SET ASIDE for having been rendered
with grave abuse of discretion, and the decision of the Labor Arbiter in NLRC NCR Case No. 00- Moreover, employees who are members of a work pool from which a company (like petitioner
07-03994-92 is REINSTATED, subject, however, to the modification above mentioned in the corporation) draws workers for deployment to its different projects do not become regular
computation of back wages.
employees by reason of that fact alone. The Court has enunciated in some cases that members to private respondent’s main business, steel-making”; and (ii) they have rendered service for six
of a work pool can either be project employees or regular employees. (6) or more years to private respondent NSC.

The principal test for determining whether employees are project employees or regular ISSUE:
employees is whether they are assigned to carry out a specific project or undertaking, the
duration and scope of which are specified at the time they are engaged for that project. Such Whether or not petitioners are considered “permanent employees” as opposed to being only
duration, as well as the particular work/service to be performed, is defined in an employment “project employees” of NSC.
agreement and is made clear to the employees at the time of hiring.

In this case, petitioners did not have that kind of agreement with respondents. Neither did they
inform respondents of the nature of the latters work at the time of hiring. Hence, for failure of
petitioners to substantiate their claim that respondents were project employees, we are HELD:
constrained to declare them as regular employees.
The Court held NO.
WHEREFORE, the petition is hereby DENIED.
Function of the proviso. Petitioners are not considered “permanent employees”. However,
PROJECT EMPLOYEES—Defined contrary to petitioners’ apprehensions, the designation of named employees as “project
employees” and their assignment to a specific project are effected and implemented in good
faith, and not merely as a means of evading otherwise applicable requirements of labor laws.

On the claim that petitioners’ service to NSC of more than six (6) years should qualify them as
G.R. No. 109902. “regular employees”, the Supreme Court believed this claim is without legal basis. The simple
fact that the employment of petitioners as project employees had gone beyond one (1) year,
FACTS: does not detract from, or legally dissolve, their status as “project employees”. The second
paragraph of Article 280 of the Labor Code, quoted above, providing that an employee who has
[P]etitioners, as employees of private respondent National Steel Corporation (NSC), filed served for at least one (1) year, shall be considered a regular employee, relates to casual
separate complaints for unfair labor practice, regularization and monetary benefits with the employees, not to project employees.
NLRC, Sub-Regional Arbitration Branch XII, Iligan City. The complaints were consolidated and
after hearing, the Labor Arbiter declared petitioners “regular project employees who shall Petition for Certiorari dismissed for lack of merit. NLRC Resolutions affirmed.
continue their employment as such for as long as such [project] activity exists,” but entitled to
the salary of a regular employee pursuant to the provisions in the collective bargaining
agreement. It also ordered payment of salary differentials.

The NLRC in its questioned resolutions modified the Labor Arbiter’s decision. It affirmed the
Labor Arbiter’s holding that petitioners were project employees since they were hired to perform
work in a specific undertaking — the Five Years Expansion Program, the completion of which
had been determined at the time of their engagement and which operation was not directly
related to the business of steel manufacturing. The NLRC, however, set aside the award to
petitioners of the same benefits enjoyed by regular employees for lack of legal and factual basis.

The law on the matter is Article 280 of the Labor Code, where the petitioners argue that they are
“regular” employees of NSC because: (i) their jobs are “necessary, desirable and work-related
CISELL A. KIAMCO vs. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE and for a fixed term. Therefore Kiamco could not question his dismissal since it was in
NATIONAL OIL COMPANY (PNOC) and PNOC-ENERGY DEVELOPMENT CORPORATION accordance with his employment contract.
Kiamco appealed the decision of the Labor Arbiter to public respondent National Labor Relations
G. R. No. 129449 Commission (NLRC) which reversed the Labor Arbiter and ruled that the complainant as a
regular employee of the respondents have been illegally dismissed by the latter. Private
FACTS: respondents filed a Motion for Reconsideration of the decision of the NLRC which modified its
previous decision. Hence, this petition.
On 1 July 1992 private respondent PNOC through its Energy Research and Development
Division, PNOC-EDC, hired petitioner Cisell Kiamco as a project employee in its Geothermal ISSUE:
Agro-Industrial Plant Project in Valencia, Negros Oriental. The Contract of Employment
stipulated among others that Kiamco was being hired by the company as a technician for a Whether the herein petitioner is a project or a regular employee; whether he is entitled to
period of five (5) months from 1 July 1992 to 30 November 1992, or up to the completion of the reinstatement and payment of backwages.
project, whichever would come first, at a monthly salary of P3,500.00.
After the termination of the contract, a second one was entered into by the parties containing
basically the same terms and conditions except that the work-time was reduced to twenty-two The principal test for determining whether particular employees are properly characterized as
days per month instead of twenty-six as stipulated in the first contract. The period of employment “project employees,” as distinguished from “regular employees,” is whether or not the “project
was from 1 December 1992 to 30 April 1993. Thereafter Kiamco was again re-hired. This time employees” were assigned to carry out a “specific project or undertaking,” the duration (and
the contract was for six months spanning 1 May 1993 to 30 November 1993 with an increased scope) of which were specified at the time the employees were engaged for that project. As
salary of P3,850.00 per month. defined, project employees are those workers hired (1) for a specific project or undertaking, and
(2) the completion or termination of such project or undertaking has been determined at the time
However on 20 October 1993 Kiamco received a Memorandum from the administration of engagement of the employee.
department demanding an explanation from him on certain infractions he allegedly committed
such as misconduct, AWOL, non-compliance of admin procedures and unauthorized use of All the employment contracts which Kiamco signed stipulated that he was being employed by
company vehicles. Kiamco tried to explain his side but private respondents found his explanation private respondents in their Geothermal Agro-Industrial Demonstration Plant Project in Valencia,
unsatisfactory. On 28 October 1993 Kiamco received a memorandum placing him under Negros Occidental. Furthermore, not only was Kiamco assigned to a specific project, but the
preventive suspension from 1 November 1993 to 30 November 1993 pending further duration and completion of such project had also been determined at the time of his employment.
investigation. No investigation however was ever conducted. Private respondents contended From the foregoing discussion it is apparent that Kiamco was correctly labeled by the NLRC as
that an investigation was not necessary since Kiamco had ceased to be an employee ipso facto a project employee. The basis for this conclusion is indeed well-founded.
upon the expiration of his employment contract on 30 November 1993.
However, the argument of private respondents that reinstatement and payment of back wages
On 1 December 1993 Kiamco reported back to work but was prevented by security guards from could not be made since Kiamco was not a regular employee is apparently misplaced. As quoted
entering the company premises. On 27 May 1994 private respondent PNOC-EDC reported to above, the normal consequences of an illegal dismissal are the reinstatement of the aggrieved
the Department of Labor and Employment that petitioner Kiamco was terminated on 1 November employee and the grant of back wages. These rights of an employee do not depend on the
1993 due to the expiration of his employment contract and the abolition of his position. Thus on status of his employment prior to his dismissal but rather to the legality and validity of his
25 April 1994 Kiamco filed before the NLRC Sub-Regional Arbitration a Complaint for illegal termination. The fact that an employee is not a regular employee does not mean that he can be
suspension and dismissal against the PNOC. He prayed that he be reinstated to his former dismissed any time, even illegally, by his employer.
position and paid back wages. On 30 June 1995 Labor Arbiter Geoffrey P. Villahermosa
rendered a Decision dismissing the complaint for lack of merit. According to the Labor Arbiter,
the three employment contracts were freely and voluntarily signed by Kiamco and the PNOC Indeed, security of tenure – the right not to be removed from one’s job without valid cause and
representatives. The contracts plainly stated that Kiamco was being hired for a specific project valid procedure – is so fundamental it extends to regular as well as non-regular employment.
Hence, the Court ordered private respondents Philippine National Oil Company (PNOC) and business or trade of the employer, except where the employment has been fixed for a specific
PNOC-Energy Development Corporation (PNOC-EDC) to REINSTATE petitioner Cisell project or undertaking, the completion or termination of which has been determined at the time
immediately to his former position without loss of seniority rights and privileges with full back of the engagement of the employee or where the work or services to be performed is seasonal
wages from the date of his dismissal until his actual reinstatement. 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
PHILIPPINE JAI-ALAI & AMUSEMENT CORP. VS CLAVE 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.
GR No: L-54136
Private respondents were hired for a specific project to renovate the main building, where major
FACTS: repairs such as painting the main building, repair of the roof, cleaning of clogged water pipes
and drains, and other necessary repairs were required. It was made known, and so understood
On February 2, 1976, petitioner hired plumber Cadatal and mason Delgra together with 30 other at the start of the hiring, that their services would last until the completion of the renovation. They
workers for a period of one month to continue even after that period should their services be rendered service from February 2 to December 11, 1976, almost 11 months, but less than a
needed further in the renovation work. This renovation was completed by the end of October year. In its Report to the Department of Labor, petitioner gave the reason for termination as "due
1976 but their services were still need for further projects. On November 17, 1976, private to termination of project. 3 It was only private respondents Cadatal, Jr. and Delgra, out of the 32
respondents received notice of termination effective November 29, 1976, but since minor repairs hired for the renovation, who questioned their termination, the 30 other workers having
were still needed, they worked up to December 11, 1976 and were fully paid for their labor up to acquiesced to their termination. Private respondents merely alleged in their letter-complaint that
that date. On December 13, 1976, petitioner filed with the former Department of Labor a report "kami'y inalis sa trabaho ng walang dahilan." There could be no other reason, however, than that
of termination of the services of private respondents and 30 others, due to completion of the the termination of private respondents was because their services were no longer needed and
project. The report listed them as "casual emergency workers." A summary Order was issued they had nothing more to do since the project for which they were hired had been completed.
on December 24, 1976 for reinstatement with full back wages. The Order of December 24, 1976 The fact was not that private respondents were hired as maintenance helpers, because petitioner
was affirmed in an Order dated July 13, 1977. This Order was in turn appealed to the Office of corporation had a regular maintenance force. Private respondents, as well as the other 30
the President. The appeal was dismissed on January 25, 1979. Petitioner's Motion for workers, were needed as additional hands for the other small jobs after the renovation cannot
Reconsideration was denied on March 19, 1979. On April 26, 1980, an Alias Writ of Execution be deemed maintenance but more of casual work.
was issued to collect from petitioner corporation the total amount of 26,260.00, representing
private respondents' full back wages. And, on June 5, 1980, a second Motion for Reconsideration The casual or limited character of private respondents' employment, therefore, is evident. They
dated April 24, 1980, was denied by respondent Clave, since only one such Motion is allowed were engaged for a specific project or undertaking and fall within the exception provided for in
and the grounds invoked were substantially the same as those previously raised. Respondents Article 281 of the Labor Code, supra. Not being regular employees, it cannot be justifiably said
allege that they had been terminated without just cause. that petitioner had dismissed them without just cause. They are not entitled to reinstatement with
full back wages Thus previous decision is reversed and set aside.
Whether or not private respondents are regular employees?
GR No: L-66119
The Court held NO.
The private respondents are all workers of petitioner Sandoval Shipyards Inc. engaged in the
Art 281 of the Labor Code states that: Art. 281. Regular and Casual Employment. — The building and repair of vessels. According the petitioner, each vessel is a separate project and
provisions of written agreement to the contrary notwithstanding and regardless of the oral thus employment shall cease upon completion of a vessel. On the contrary, the private
agreements of the parties, an employment shall be deemed to be regular where the employee respondents claim that they are regular employees because the termination of one project does
has been engaged to perform activities which are usually necessary or desirable in the usual not mean the end of their employment since they can be assigned to unfinished projects.
ISSUE: thus charging private respondent with committing unfair labor practices. Petitioner further
complained of non-payment of service incentive leave benefits and underpayment of 13th month
Whether or not the workers are project employees? pay. On the other hand, private respondent, in its position paper filed on July 16, 1992,
maintained that it had valid reasons to terminate petitioner’s employment and disclaimed any
knowledge of the existence or formation of a union among its rank-and-file employees at the
HELD: time petitioner’s services were terminated. Private respondent stressed that its business
"…relies heavily on companies availing of its services. Its retention by client companies with
The Court held YES. Policy Instructions No. 20 of the Secretary of Labor states that: Project particular emphasis on data encoding is on a project to project basis," usually lasting for a period
employees are those employed in connection with a particular construction project. Non-project of "two (2) to five (5) months." Private respondent further argued that petitioner’s employment
(regular) employees are those employed by a construction company without reference to any was for a "specific project with a specified period of engagement." According to private
particular project. Project employees are not entitled to termination pay if they are terminated as respondent, "…the certainty of the expiration of complainant’s engagement has been determined
a result of the completion of the project or any phase thereof in which they are employed, at the time of their (sic) engagement (until 27 November 1991) or when the project is earlier
regardless of the number of projects in which they have been employed by a particular completed or when the client withdraws," as provided in the contract. "The happening of the
construction company. Moreover, the company is not required to obtain clearance from the second event [completion of the project] has materialized, thus, her contract of employment is
Secretary of Labor in connection with such termination. In the case, it cannot be said that even deemed terminated per the Brent School ruling." Finally, private respondent averred that
after the completion of one vessel the employment shall still continue because each vessel is a petitioner’s "claims for non-payment of overtime time (sic) and service incentive leave [pay] are
different project depending on the need of the client. The complaints for illegal layoff are without factual and legal basis.”
ISSUE: Whether or not Petitioner was a "regular employee," NOT a "project employee" as found
WHEREFORE, the NLRC resolution dated July 29, 1983 and the order of Deputy Minister by public respondent
Leogardo, Jr., dated March 15, 1983 are reversed and set aside. The complaints for illegal layoff
are dismissed. No costs. HELD:

IMBUIDO v NLRC The Court held YES. In the instant case, petitioner was engaged to perform activities which were
usually necessary or desirable in the usual business or trade of the employer, as admittedly,
G.R. No. 114734 petitioner worked as a data encoder for private respondent, a corporation engaged in the
business of data encoding and keypunching, and her employment was fixed for a specific project
FACTS: or undertaking the completion or termination of which had been determined at the time of her
engagement, as may be observed from the series of employment contracts between petitioner
and private respondent, all of which contained a designation of the specific job contract and a
Petitioner was employed as a data encoder by private respondent International Information specific period of employment. However, even as we concur with the NLRC’s findings that
Services, Inc., a domestic corporation engaged in the business of data encoding and petitioner is a project employee, we have reached a different conclusion. In the recent case of
keypunching, from August 26, 1988 until October 18, 1991 when her services were terminated. Maraguinot, Jr. vs. NLRC, we held that "[a] project employee or a member of a work pool may
From August 26, 1988 until October 18, 1991, petitioner entered into thirteen (13) separate acquire the status of a regular employee when the following concur: 1) There is a continuous
employment contracts with private respondent, each contract lasting only for a period of three rehiring of project employees even after [the] cessation of a project; and 2) The tasks performed
(3) months. Aside from the basic hourly rate, specific job contract number and period of by the alleged "project employee" are vital, necessary and indispensable to the usual business
employment, each contract contains the following terms and conditions: "a. This Contract is for or trade of the employer." The evidence on record reveals that petitioner was employed by
a specific project/job contract only and shall be effective for the period covered as above- private respondent as a data encoder, performing activities which are usually necessary or
mentioned unless sooner terminated when the job contract is completed earlier or withdrawn by desirable in the usual business or trade of her employer, continuously for a period of more than
client, or when employee is dismissed for just and lawful causes provided by law. The happening three (3) years, from August 26, 1988 to October 18, 1991 and contracted for a total of thirteen
of any of these events will automatically terminate this contract of employment. In her position (13) successive projects. We have previously ruled that "[h]owever, the length of time during
paper dated August 3, 1992 and filed before labor arbiter Raul T. Aquino, petitioner alleged that which the employee was continuously re-hired is not controlling, but merely serves as a badge
her employment was terminated not due to the alleged low volume of work but because she of regular employment." Based on the foregoing, we conclude that petitioner has attained the
"signed a petition for certification election among the rank and file employees of respondents," status of a regular employee of private respondent.
CHUA VS. CA AND HAO Clearly, SRC is an offended party. Hence, SRC has a cause of action. And the civil case for the
corporate cause of action is deemed instituted in the criminal action.
G.R. NO. 150793
However, the board of directors of the corporation in this case did not institute the action against
FACTS: petitioner. Private respondent was the one who instituted the action. Private respondent asserts
that she filed a derivative suit in behalf of the corporation. This assertion is inaccurate. Not every
suit filed in behalf of the corporation is a derivative suit. For a derivative suit to prosper, it is
PR Lydia Hao, treasurer of Siena Realty Corporation, filed a complaint-affidavit against petitioner required that the minority stockholder suing for and on behalf of the corporation must allege in
for committing acts of falsification by falsifying the Minutes of the Annual Stockholders meeting his complaint that he is suing on a derivative cause of action on behalf of the corporation and all
of the Board of Directors by causing it to appear in said Minutes that LYDIA HAO CHUA was other stockholders similarly situated who may wish to join him in the suit. It is a condition sine
present and has participated in said proceedings, when in truth and in fact, as the said accused qua non that the corporation be impleaded as a party because not only is the corporation an
fully well knew that said Lydia Hao was never present during the meeting. indispensable party, but it is also the present rule that it must be served with process. The
judgment must be made binding upon the corporation in order that the corporation may get the
Petitioner alleges that respondent Lydia Hao has no the authority to bring a suit in behalf of the benefit of the suit and may not bring subsequent suit against the same defendants for the same
Corporation since there was no Board Resolution authorizing her to file the suit. For her part, cause of action. In other words, the corporation must be joined as party because it is its cause
respondent Hao claimed that the suit was brought under the concept of a derivative suit. of action that is being litigated and because judgment must be a res adjudicata against it.

ISSUE: In the criminal complaint filed by herein respondent, nowhere is it stated that she is filing the
same in behalf and for the benefit of the corporation. Thus, the criminal complaint including the
(1) Is the criminal complaint in the nature of a derivative suit? civil aspect thereof could not be deemed in the nature of a derivative suit.

(2) Is Siena Realty Corporation a proper petitioner in SCA No. 99-94846?


Under Section 36 of the Corporation Code, read in relation to Section 23, where a corporation is
an injured party, its power to sue is lodged with its board of directors or trustees. An individual
stockholder is permitted to institute a derivative suit on behalf of the corporation wherein he holds
stocks in order to protect or vindicate corporate rights, whenever the officials of the corporation
refuse to sue, or are the ones to be sued, or hold the control of the corporation. In such actions,
the suing stockholder is regarded as a nominal party, with the corporation as the real party in

A derivative action is a suit by a shareholder to enforce a corporate cause of action. The

corporation is a necessary party to the suit. And the relief which is granted is a judgment against
a third person in favor of the corporation. Similarly, if a corporation has a defense to an action
against it and is not asserting it, a stockholder may intervene and defend on behalf of the

In the Criminal Case, the complaint was instituted by respondent against petitioner for falsifying
corporate documents whose subject concerns corporate projects of Siena Realty Corporation.