® Republic of the Bhilippines ‘Supreme Court ‘anita SECOND DIVISION ENGINEERING & G.R.No. 201247 CONSTRUCTION CORPORATION OF ASIA [now First BALFOUR, Present INCORPORATED], Petitioner, PERLAS-BERNABE, Chairperson, LEONEN,” = versus = HERNANDO, INTING, and’ DELOS SANTOS, J SEGUNDINO PALLE, FELIX VELOSA, ‘ALBERTO — PAMPANGA, RANDY. Promulgated: 9 GALABO, MARCO GALAPIN _ and GERARDO FELICITAS, 13 ue 2000 __| fing Respondents Cc DECISION HERNANDO, J Challenged in this Petiion for Review on Certlorariundet Rule 45 of the Rules of Court are the September 13, 2011 Decision’ of the Court ‘of Appeals (CA) in CA-G.R. SP No. 114599 which held that respondents Segundino Palle (Palle), Felix Velosa (Velosa), Alberto Pampanga (Pampanga), Randy Galabo (Galabo), Marco Galapin (Galapin) and Gerardo Felictas (Felicitas) were regular employees of petitioner Engineering & Construction Corporation of Asia (ECCA) who were illegally terminated, and its March 22, 2012 Resolution! which denied the “Motion for Partial Reconsideration threo “Dyed as dir! Mee ft Sx Dvn Spi One Wo. 2780.00 aly ‘Rat 36: pnw by Aste ui akin S, Abad sd cocere in by Acie uncle Kero at Gos @ BerDecision 2 GR No, 201247 ‘The Pas Petitioner ECCA, now known as Fist Balfour Incorporated, is @ domestic corporation engaged in the construction business, In 2003, it ‘merged with First Philippine Balfour Beatty Incorporated, with the later being absorbed by the former. Subsequently, it was renamed First Balfour Incorporated. Respondents Palle, Velosa, Pampanga, Galabo, Galapin and Felictas (collectively, respondents) were hired by ECCA on various dates to-work in its construction business. ‘The Antecedents ‘The instant case stemmed from the illegal dismissal complaint filed iin 2004 by he respondents withthe National Labor Relations Commission (NLRC) against ECCA and its president, Oscar Lopez Petitioner ECA's Version ECCA claimed that respondents, as project employees, were validly terminated in view of the project's completion, It pointed out that respondents were not regular employees, but merely project employees since they were hired for a specific projector undertaking, the termination ‘of which was determined atthe time they were hired Im addition, it argued that: (i) the company hired respondents as project employees to work at its various construction projects from the ‘year 1990; (i) it informed them of the scope and duration oftheir work at the time they were engaged in each of those projects; and (i) their project, employment contract expired upon completion of the specific project. Consequently, they were also separated from serviee upon completion of ‘each project Respondents"Version Respondents mainly argued that they were not project employees but were regular employees of ECCA." They claimed that ECA hired them on dlflerent dates to perform tasks which were necessary and desirable in itsDecision 3 GR, No, 201247 construction business. However, ECCA informed them thatthe cause of their termination was “project completion.” The details of respondents’ ‘employment terms were as follows.” ‘Complainants ] Date Hired | Nature of Work | Date of “Termination Palle 1975 Carpenter, ‘Aug. 30, 2007 Velosa 1982 ‘Carpenter Feb. 25, 2001 Felictas 1982 ‘Carpenter ‘Aug. 30,2001 Pampanga | Feb. 4, 1997 | Plumber’ Pipette | — Sept. 1, 2001 Galabo ‘Oct, 1998 Steelman ‘Sept. 10, 2001 [= Galapin ‘Oct. 1998 Steelman Sept. 15,2001 Respondents further claimed that ECCA continuowsly employed them for different construction projects of the company. However, they 4id not enjoy the benefits given by the company to its regular employees, such as, Christmas bonuses, hospitalization benefits, sick leaves, vacation Teaves and service incentive leaves, among others" Respondents further pointed out tht they were regular employees, and not project employees, since they performed tasks Which were vital necessary and indispensable to ECA's construction busines, thus there vas a reasonable coumection between their naire af Work and ECCA’s business? ‘Moreover, respondents asserted that although they may have signed employment contracts for some of ECCA’s projects, they were asked t0 work in new projects or transferred to other existing projects without the beneiit of corresponding employment contracts." Furthermore, respondents claim that ECCA’s failure to report the {termination of their employment to the Department of Labor and Employment (DOLE) every time that the company completed a project proved that respondents were not project employees but its regular employees." In addition, respondents argued that since they have attained the status as ECCA’s regular employees, they were entitled to all the benefits and tights appurtenant to a regular employee, including security of tenure. “Thus, respondents prayed that they be reinstated to their former positionsDesison ‘ GR No. 201247 ‘and that they be awarded wages and other monetary benefits, as authorized by law.” In a June 16, 2007 Decision.® the Labor Arbiter held that respondents were regular employees of ECC. The Labor Arbiter pointed ‘out that the company has not presented any document showing that in every termination of the project, respondents’ employment was als0 terminated." Furthermore, the Labor Arbiter also noted that respondents ‘were hired by ECCA for one project but were later repeatedly rehired for ‘more than 20 to 30 years in several other projects, Thus, this showed that respondents have become regular employees of ECC, The Labor Arbiter ‘emphasized that where the employment of project employees is extended long afer the first project had been finished, the employees ate removed fiom the scope of project employment snd are considered regular employees. Furthermore, the Labor Arbiter held that respondents have ‘become regular employees of ECCA by the mere fact that the company failed to submit termination reports to the DOLE following the termination ‘of respondents’ project employment."* Thus, the Labor Arbiter ordered [ECCA to reinstate respondents to their former positions effective June 16, 2007 and to pay them full baskwages, 13° month pay, service incentive leave pay, and eust of living ullowanee, oF a total of P3,699,526.82." dispositive portion ofthe Labor Arbiter’s Decision partly reads WHEREFORE, [petiioner is] herby diweted to reinstate ‘complainants to ther former positions efeeve June 16,2007 and o pay fl fackwages inthe ttl amet of 5,655,328 82 [xx Ni ns De ‘Agprieved, ECCa filed an appeal with the NLRC. In its March 23, 2009 Decision, the NLRC reversed the findings of the Labor Arbiter and granted ECCA’s appeal. The NLRC cited the rulings in Ciaeo, Jp, ¥. CE. Construction Corporation! and Filipinas Pre-Fabricated Building ‘Systems (Fisystems), Inc. v. Puente that repeated hiring does not change da ‘sid 33-5 peed by Cmisiner Ra Gan onan iby resins Comision Gre . Nog tnd Commis Pt Voce, "ag pu 2m 2760s. ans PL 23 94)Desison s GR No, 201247 the status of one's employment as project employee or automatically ‘makes one as a regular employes.” Thus, the NLRC held that respondents \Were not illegally terminated but that their employment ended in view of the completion of the projects? The dispositive portion of said Decision reads: WHEREFORE, the instant appeal is herby GRANTED. The ssid decison ofthe Tabor Avitr dated 16 Jue 2007 is REVERSED tnd SET ASIDE and the complaint danissd for lack of exit" Respondents filed 4 Motion for Reconsideration of the foregoing Decision, which was denied inthe NLRC's March 24, 2010 Resolution" ‘ourt of Appeal ‘Aggrieved, respondents fied a Petition for Certiorar?® under Rule 65 of the Rules of Court with the CA. In its September 13, 2011 Decision, the CA held in favor of respondents and ruled that they were regular employees, and were therefore illegally dismissed. The appellate court pointed out that ECA failed to present any written contract of {employment to substantiate its claim before the court. Thus, the appellate court held that although the absence of a written contract doesnot by itsel grant regular status 10 the employees. it is evidence that they were informed of the duration and scope of their work and their status 8 project employees at the start of their engagement.” The dispositive Portion of stid Decision reads WIEEREFORE, the petson is GRANTED. The ssid March 23, 2009 Decision of public respondent NLRC in NLRC-NCR CA No, 00. (1229607 [NLRC Case No. NCR 0-09-10553-D4] ie REVERSED and SET ASIDE. In Hou theres, s ew judgment i endeed einsaing the Decision dated June 16,2007 ofthe Labor Arbiter in NERC-NCR Cast Nos. O008-09014-08, 00-0.00960.0 and 00.09-10553-04 with the MODIFICATION thatthe liability of respondent Oseat Lope forthe payment of backwages and other-monelry bene. in favor of [respondent is DELETED. SO ORDERED”Decision ‘ GR.No, 201247 BCCA filed a Motion for Reconsideration which was denied in the (CAs March 22, 2012 Resolution * ECCA then filed the instant Petition for Review on Certiorari under Rule 45 ofthe Rules of Cour, raising the following assignment of eror: “The Court of Appeals ened and gravely abused is discretion in| eanting the petition and finding tht respondents were regular employes ‘ot petitioner and were illeslly ismised In sum, the main issue in the instant case is whether or not respondents were illegally dismissed as regular employees or validly terminated in view of the completion of theit contract as project employees. The Courts Ruling We find ECCA’s petition unmeriterious. Thus, we uphold the findings of the CA that respondents were regular empioyees who were illegally terminated Regular and Project Employees, distinguished. Amicle 295 [280] of the Labor Code provides the following definition of regular and project employees ARTICLE 295, [280] Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and "egarlss of the orl agreement ofthe partis, a8 emplayment shall be ‘deemed o be regular where the employee hasbeen engaged t perform activities which are usually neessry r desirable inthe wal business tor trade ofthe employer, except where the employment hat been fined for a specie projector undertaking the completion ot termination of hich has been determined at the time of the engagement af the tmplayse or whee the werk or srvice tobe performed is season ‘ute athe employment so the dation a fe season, ‘An erployment shal be demo tobe casual iit isnt covered by ‘te preceding partraph: Proved, That any” employee who as rendered. at least one year of service, whether such service is ‘continuous or broken, shall be considered 2 regular employee Witt Fespect tothe activity in which he is employed and his employment Shall continue while such activity exist. (Enphass supped 15657.Desison 7 GR.No, 201247 ‘On the other hand, DOLEs Department Order No. 19, series of 1993 (D0. No. 19), otherwise known as the Guidelines Governing the Employment of Workers inthe Construction Industry, provides Section 2. EMPLOYMENT STATUS 2.4 Clasicatio of employees. - The employees inthe onstruction industy are generally categorized a 4.) project cenployees and b) en jet emplayess Project employees sre those employed in connection ‘with particular constuction puject or pase theca and aie ‘employment is coterminous wit each projet or phase th projet to wich hey ae assigned 2.3 Project completion and ehiring of workers. — ') Upon completion of the projectors phase thereof, the projec ‘mployce may be rehired fr another undertaking provide however, hat ‘sich ekiting conforms with the provisions oad tis asian, Inch se, the ast day of sevice with the employer in the mecane project shouldbe mndcated inthe employment astern, Thus, based on the foregoing provisions, an emplayment is generally deemed regular where: (i) the employee has been engaged to perform activities which are usually necessaty or desirable in the usual business or teade of the employer, subject to exceptions, such as when one isa fixed, Projector seasonal employee; or i) the employee has been enaaged for al least a year, with respect to the activity he or she is hited, and the ‘employment of such employee remains while such activity existe On the other hand, project employee “is one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined atthe time of the engagement of the employee.” Thus, the “services of project-based employees are co-terminous with the project and may be terminated "upon the end or completion ofthe project or a phase thereof for which they were hited." Herma Sad In Oi SP 6792075Decision ® GR No, 201247 Generally, length of service is a measure to determine whether of not ‘an employee wino was initially hired on a temporary basis has tained the status ofa regular employee who is entitled to security of tenure. However, such measure may not necessarily be applicable ina construction industry since construction firms cannot guarantee continuous employment of thet workers afer the completion stage of a project. In addition, a project jmployce’s work may or may not be usually necessary or desirable inthe usual business or trade ofthe employer. Thus the fact tha a project employee's work is usually necessary and desirable in the business ‘operation of hisher employer does not necessarily impair the validity of the project employment contract which specifically stipulates a fixed duration of employment. In Lopee v. Irvine Construction Corp, it was held that “the Principal test for determining whether particular employees are properly characterized es ‘project employees[,)’ as distinguished. from “regular employees,’ is witether or not the “project employees? were assigned to carry outa “specific project or undertaking,” the duration and scope of which were specified at the time the employees were engaged for ‘that project.” In the instant ease, in order to ascertain whether respondents ‘ere project employees, as claimed by ECA, it is essential to determine ‘whether notice was given to them that they were being engaged just for a specific projet, which notice must be made atthe time of hiring ‘We find that ECCA failed to present substantial evidence to show that it informed respondents of the duration and scope of their work atthe time of their hiring. Upon careful review of the company's respective contracts of employment with respondents, this Court holds that the employment contracts were lacking in details to prove that respondents had been duly informed of the duration and scope of their work, and of their status as project employees at the time of their hiring, The respective contracts of respondents may have been dated at the time oftheir issuance, but nowhere did said contracts show as to when respondents supposedly signed or received the same or were informed ofthe contents thereof. This ives rise to the distinct possibility that respondents were not informed of their status as project employees, as well asthe scope and duration ofthe projects that were assigned to them at the time oftheir engagement. Thus, ECCA failed to refute respondents’ claim that they worked in new projects 5 it Canarian Cay Trina 9 185,190 210. 2 Herma Shine» Olver pane, 684843 eo Sa Bon Sn Garcon GR No 241812 Ci), Omer 28 ting Plan. Nee {lati Common 33 P2225 98 SC Tah 737d) a ae Outre dg Camractnn. OK PML19, 191 20165) ‘nd ty Comicon Corp rad spDesision ° GRNo.201247 OF they were transfered to other existing projects without the benefit of theit corresponding employment contracts? Therefore, ECCA failed to Bersuasively show: that respondents herein were informed at the time of ‘their engagement that their work was only forthe duration of the project, Moreover, ECA failed to present other evidence or other written {contracts to show that t informed respondents ofthe duration and scope of| theie work, Settled is the rule that “although the absence of a sition contract docs not by itself grant regular status to the employees, it ie ‘evidence that they were informed of the duration and scope oftheir work and their status as project employees at the start of their engagement. Whea no other evidence is offered, the absence of employment contracts raises a serious question of whether the employees were sufficiently apprised at the start of their employment of their statis as project employees.” In addition, We likewise note thatthe company did not submit a report with the DOLE of the termination of respondents’ employment every time a project is completed, whieh isan indication that the workers Were not project employees but regular ones.” The employer has the burden to prove ‘that an emplayce was hived for project ‘employment. Its necessary to note that an employer has the burden to prove that the employee is indeed a project employee. Thus, “the employer must establish that (a) theemployee was assigned to cany oul a Particular project or undertaking; and, (b) the duration and seape of which as specified a the time of engagement." However this Court finds that ECA failed to prove thet it informed respondents, atthe time of engagement, that they were hired as project «employees. Hence, respondents were without prior notice of the duration and scope of their work. Indeed, “[w]hile the lack of a written contract docs not necessarily make one a regular employee, writen contract s2tVes as proof that employees were informed of the duration and scope of their work and their stats as project employee at the commencement of their engagement." 2 Se i alla Employment Con pant 2-126 ™ Qua gis Cota es annag Stan a ie, 0.6 No’ 18ers of 19, Scion eh a acon Syne Comrie, em, ia, wen Sc Cora eGR Ne 257028 29.2008Decision 0 GR. No, 201267 ‘Therefore, without such proof, itis presumed that respondents are regular employees." Respondents were iegally terminated. In view of ECCA’s indisputable failure to discharge its burden to prove that respondents were project employees, We find that the CA, properly found them to be regular employees, Therefore, respondents, a regular employees, may only be dismissed for jut or authorized causes ‘and upon compliance with procedural due process, ie, notice and hearing." This Court notes that completion ofa project is nota valid cause tw terminate regular employees, such as respondents herein Since the foregoing requirements were not observed, this Court Upholds the finding ofthe CA and Labor Arbiter that the respondents were illegally dismissed, Finally, pursuant to prevailing jurisprudence, we hereby impose interest at the rate of six percent (6%) per annum on all the monetary ‘wards from the finality ofthis Decision until paid in fll ACCORDINGLY, the instant Petition ig DENIED, The assailed September 13, 2011 Decision and the March 22, 2012. Resolution ofthe Court of Appeals in CA G.R. SP No. 114599 are hereby AFFIRMED with MODIFICATION that interes atthe rate af six percent (6%) per annum is imposed on all monetary awards from the finality of this Decision until fully paid. No pronouncement as to casts aay Ags Contato, ae 38 2, pes: rane Canara Pa 73759),weoonern alte variance Senior Associate lustice GL yy Associate Justice Associate Justice cocanb ons sans Associate Justice ATTESTATION [attest that the conclusions inthe above Decision had been reached jn consultation before the case was assigned tothe vritr ofthe opinion of the Cour’s Division, esretam. AU penwane pean aein 2 GR No. 201287 CERTIFICATION Pursuant wo Seton 13, Arle VI ofthe Conton a the Division Chatpenon'sAtegaon Tey ta hc ae stove Dest hat osm soxhed in conmioa Sees ae ‘sido he witro te option oft Cnt Dn IN nN (i dh DIOSDADO Mr. PERALTA Chief ustice