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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

113166 February 1, 1996

ISMAEL SAMSON, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ATLANTIC GULF AND PACIFIC CO., MANILA, INC.,respondents. DECISION REGALADO, J.: In the present petition for review on certiorari, which should properly have been initiated as and is hereby considered a special civil action for certiorari under Rule 65, herein petitioner Ismael Samson assails the decision of public respondent National Labor Relations Commission (NLRC) dated November 29, 1993 1 which declared that he was a project employee, in effect reversing the earlier finding of labor arbiter Felipe T. Garduque II that he is actually a regular employee. Petitioner has been employed with private respondent Atlantic Gulf and Pacific Co., Manila, Inc. (AG & P) in the latter's various construction projects since April, 1965, in the course of which employment he worked essentially as a rigger, from laborer to rigger foreman. From 1977 up to 1985, he was assigned to overseas projects of AG & P, particularly in Kuwait and Saudi Arabia. On November 5, 1989, petitioner filed a complaint for the conversion of his employment status from project employee to regular employee, which complaint was later amended to include claims for underpayment, nonpayment of premium pay for holiday and rest day, refund of reserve fund, and 10% thereof as attorney's fees. Petitioner alleged therein that on the basis of his considerable and continuous length of service with AG & P, he should already be considered a regular employee and, therefore, entitled to the benefits and privileges appurtenant thereto. The labor arbiter, in a decision dated June 30, 1993, 2 declared that petitioner should be considered a regular employee on the ground that it has not been shown that AG & P had made the corresponding report to the nearest Public Employment Office every time a project wherein petitioner was assigned had been completed and his employment contract terminated, as required under DOLE Policy Instruction No. 20. Furthermore, pursuant to the same policy instruction, the labor arbiter found that since petitioner was not free to leave anytime and to offer his services to other employers, he should be considered an employee for an indefinite period because he is a member of a work pool from which AG & P draws its project employees and is considered an employee thereof during his membership therein, hence the completion of the project does not mean termination of the employer-employee relationship. In refutation of the allusion of AG & P to the maxims of "no work, no pay" and "a fair day's wage for a fair day's labor," the labor arbiter held that there is no evidence that at one point in time the respondent has not secured any contract and, further, that complainant has been continuously rendering service in the corporation since 1965 up to the date of his aforesaid decision. Consequently, the labor arbiter ordered that petitioner's employment status be changed from project to regular employee effective November 5, 1989 and that he be given other benefits accorded regular employees plus 10% thereof as attorney's fees. The claim against petitioner's reserve fund was denied on the ground of prescription.

On appeal, public respondent NLRC reversed the decision of the labor arbiter and dismissed the complaint for lack of merit. It ruled that the evidence shows that petitioner was engaged for a fixed and determinable period, which thereby made him a project employee; that there was no evidence presented nor any allegation made by petitioner to support the labor arbiter's finding that the former was not free to leave and offer his services to other employers; that Policy Instruction No. 20 has been superseded by Department Order No. 19, Series of 1993, which provides that non-compliance with the required report to the nearest Public Employment Office no longer affixes a prescription of regular employment; and that the repeated or constant re-hiring of project workers for subsequent projects is permitted without such workers being considered regular employees. Finally, it ratiocinated that "[l]ength of service, while such may be used as a yardstick for other types of employees in other endeavor(s), does not apply to workers in the construction industry, particularly to project employees. In the case at bar, the characteristics peculiar to the construction business make it imperative for construction companies to hire workers for a particular project as the need arises and it would be financially disadvantageous to owners of construction companies to retain in its payrolls employees and/or workers whose services are no longer required in the particular project to which they have been assigned." 3 Hence this petition, which presents for resolution the sole issue of whether petitioner is a project or regular employee. Petitioner principally argues that respondent commission gravely erred in declaring that he is merely a project employee, invoking in support thereof the ruling enunciated in the case of Caramol vs. National Labor Relations Commission, et al.4 His being a regular employee is allegedly supported by evidence, such as his project employment contracts with private respondent, which show that petitioner performed the same kind of work as rigger throughout his period of employment and that, as such, his task was necessary and desirable to private respondent's usual trade or business. The Solicitor General5 fully agrees with petitioner, with the observation that the evidence indubitably shows that after a particular project has been accomplished, petitioner would be re-hired immediately the following day save for a gap of one (l) day to one (1) week from the last project to the succeeding one; and that between 1965 to 1977, there were at least fifty (50) occasions wherein petitioner was hired by private respondent for a continuous period of time. He hastens to add that Department Order No. 19, which purportedly superseded Policy Instruction No. 20, cannot be given retroactive effect because at the time petitioner's complaint was filed, the latter issuance was still in force. On the other hand, private respondent preliminarily avers that the present petition for review under Rule 45 filed by petitioner is not the proper remedy from a decision of the NLRC. Even assuming that the same may be treated as a special civil action under Rule 65, the petition must still fail for failure of petitioner to exhaust administrative remedies in not filing a motion for reconsideration from the questioned decision of respondent commission as required under Section 14, Rule VII of the Implementing Rules. Besides, the judgment under review supposedly became final and executory on January 13, 1994 pursuant to the Entry of Judgment dated February 9, 1994. Respondent AG & P then insists that petitioner is merely a project employee for several reasons. First, the factual findings of respondent commission, which is supported by substantial evidence, is already conclusive and binding and, therefore, entitled to respect by this Court. Second, Department Order No. 19 amended Policy Instruction No. 20 by doing away with the required notice of termination upon completion of the project. Hence, non-compliance with the required report, which is only one of the "indicators" for project employment, no longer affixes a prescription of regular employment, by reason of which the doctrine laid down in the Caramol case no longer applies to the case at bar. In addition, Department Order No. 19 allows the re-hiring of employees without making them regular employees, aside from the fact that the word "rehiring" connotes new employment. Third, on the basis of petitioner's project employment contracts, his services were engaged for a fixed and determinable period which thus makes each employment for every project separate and distinct from one another. Consequently, the labor arbiter supposedly erred in taking into account petitioner's various employments in the past in determining his length of service, considering that upon completion of a project, the services of the project employee are deemed terminated, his employment being coterminous with each project or phase of the project to which he is assigned.

Finally, so it is claimed, petitioner should be considered a project employee since he falls under the exception provided for in Article 280 of the Labor Code to the effect that "the provisions 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 . . . ." The bulk of the problem appears to hinge on the determination of whether or not Department Order No. 19 should be given retroactive effect in order that the notice of termination requirement may be dispensed with in this case for a correlative ruling on the presumption of regularity of employment which normally arises in case of noncompliance therewith. Both the petitioner and the Solicitor General submit that said order can only have prospective application. Private respondent believes otherwise. We find for petitioner. When the present action for regularization was filed on November 5, 1989 6 and during the entire period of petitioner's employment with private respondent prior to said date, the rule in force then was Policy Instruction No. 20 which, in the fourth paragraph thereof, required the employer company to report to the nearest Public Employment Office the fact of termination of a project employee as a result of the completion of the project or any phase thereof in which he is employed. Furthermore, contrary to private respondent's asseveration, Department Order No. 19, which was issued on April 1, 1993, did not totally dispense with the notice requirement but, instead, made provisions therefor and considered it as one of the "indicators" that a worker is a project employee. This is evident in Section 2.2 thereof which provides that: 2.2 Indicators of project employment. Either one or more of the following circumstances, among others, may be considered as indicators that an employee is a project employee. (a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable. (b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring. (c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged. (d) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer. (e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees' terminations dismissals suspensions. (f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies. (Emphasis supplied) More importantly, it must be emphasized that the notice of termination requirement has been retained by express provision of Department Order No. 19 under Section 6.1 thereof, to wit: 6.1. Requirements of labor and social legislations. (a) The construction company and the general contractor and/or subcontractor referred to in Sec. 2.5 shall be responsible for the workers in its employ on matters of compliance with the requirements of existing laws and regulations on hours of work, wages, wage related benefits, health, safety and social welfare benefits, including submission to the DOLE-Regional Office of

Work Accident/Illness Report, Monthly Report on Employees' Terminations/Dismissals/Suspensions and other reports. . . . (Emphasis ours.) Perforce, we agree with the labor arbiter that private respondent's failure to report the termination of petitioner's services to the nearest Public Employment Office, after completion of every project or a phase thereof to which he is assigned, is a clear indication that petitioner was not and is not a project employee. On the bases of the foregoing, the retroactivity or prospectivity of Department Order No. 19 would normally be of no moment. At any rate, even if the new issuance has expressly superseded Policy Instruction No. 20, the same cannot be given retroactive effect as such an application would be prejudicial to the employees and would run counter to the constitutional mandate on social justice and protection to labor. Furthermore, this view that we take is more in accord with the avowed purpose of Department Order No. 19 "to ensure the protection and welfare of workers employed" in the construction industry, and which interpretation may likewise be inferred from a reading of Section 7 thereof, applied corollarily to this case, which provides that "nothing herein shall be construed to authorize the diminution or reduction of benefits being enjoyed by employees at the time of issuance hereof." It is a basic and irrefragable rule that in carrying out and interpreting the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. The interpretation herein handed down gives meaning and substance to the liberal and compassionate spirit of the law enunciated in Article 4 of the Labor Code that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor." 7 The mandate in Article 281 of the Labor Code, which pertinently prescribes that "the provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements 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" and 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," should apply in the case of herein petitioner. It is not disputed that petitioner had been working for private respondent for approximately twenty-eight (28) years as of the adjudication of his plaint by respondent NLRC, and that his "project-to-project" employment was renewed several times. With the successive contracts of employment wherein petitioner continued to perform virtually the same kind of work, i.e., as rigger, throughout his period of employment, it is manifest that petitioner's assigned tasks were usually necessary or desirable in the usual business or trade of private respondent. 8 The repeated re-hiring and continuing need for his services are sufficient evidence of the necessity and indispensability of such services to private respondent's business or trade.9 Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order. 10 As observed by the Solicitor General, the record of this case discloses, as part of petitioner's position paper, a certification 11 duly issued by private respondent clearly showing that the former's services were engaged by private respondent on a continuing basis since 1965. The certification indubitably indicates that after a particular project has been accomplished, petitioner would be re-hired immediately the following day save for a gap of one (1) day to one (1) week from the last project to the succeeding one. 12 There can, therefore, be no escape from the conclusion that petitioner is a regular employee of private respondent. Anent the issue on non-exhaustion of administrative remedies, we hold that the failure of the petitioner to file a motion for reconsideration of the NLRC decision before coming to this Court was not a fatal omission. The exhaustion of administrative remedies doctrine is not a hard and fast rule and does not apply where the issue is purely a legal one. 13 A motion for reconsideration as a prerequisite for the filing of an action under Rule 65 may be dispensed with where the issue is purely of law, as in the present case. 14 At all events and in the interest of substantial justice, especially in cases involving the rights of workers, procedural lapses, if any, may be disregarded to enable the Court to examine and resolve the conflicting rights and responsibilities of the parties. This liberality is

2000 denying the motion for reconsideration therefrom. but the latter failed to explain her side. 4 Her contract was again renewed for two months or up to December 16. After garnering a performance rating of 3. DECISION Before us is a petition for review of the Decision1 of the Court of Appeals (CA) in CA-G. 5 when she received a performance rating of 3. RF modules. 9 She. ELOISA FADRIQUELA. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. The respondent still failed to respond. from April 5.R. SO ORDERED. is hereby REVERSED AND SET ASIDE. is a domestic corporation engaged in the production and assembly of semiconductors such as power devices. especially since it has been shown that the intervention of the Court is necessary for the protection of herein petitioner. 1993. The Case for the Petitioner The petitioner Philips Semiconductors (Phils. 1992. Inc. 1992.6 After the expiration of her third contract.R. telecommunications equipment and cars. the questioned decision of respondent National Labor Relations Commission. INC. for three months. as a consequence of which her performance rating declined to 2. petitioner.2 One was required to obtain a performance rating of at least 3. dated November 29. respondent.8. Velayo recommended to the petitioner that the respondent’s employment be terminated due to . 1993. is hereby ordered REINSTATED. RF and metal transistors and glass diods. that is. Garduque II in NCR Case No. 2004 PHILIPS SEMICONDUCTORS (PHILS. it was extended anew. Aside from contractual employees. respondent Eloisa Fadriquela executed a Contract of Employment with the petitioner in which she was hired as a production operator with a daily salary of P118. The respondent was warned that if she offered no valid justification for her absences. the petitioner employed 1.0 for the period covered by the performance appraisal to maintain good standing as an employee. 1993 to April 4. three absences in the month of May and four absences in the month of June.).029 regular workers. incurred five absences in the month of April. quality. 1993. 1992. Velayo would have no other recourse but to recommend the non-renewal of her contract. attendance and work attitude. 52149 and its Resolution dated January 26. 141717 April 14. 7 that is. from January 4. however. CATV modules.)..4. 8 the respondent’s contract was extended for another three months.warranted in the case at bar.3 but was extended for two months when she garnered a performance rating of 3. No. 1993 to June 4.8. It caters to domestic and foreign corporations that manufacture computers. vs.15. SP No. 15 WHEREFORE. Her initial contract was for a period of three months up to August 8. The employees were subjected to periodic performance appraisal based on output. and the decision of Labor Arbiter Felipe T. 00-116255-92. dated June 30. 10 Line supervisor Shirley F. 1993. On May 8. Velayo asked the respondent why she incurred the said absences.

11 in accordance with the Company Rules and Regulations. According to the respondent. Furthermore. that she was illegally dismissed. she garnered only 2. She was not notified of any infractions she allegedly committed.8 points. 1993 merely expired and was no longer renewed because of her low performance rating. the respondent’s employment automatically ceased. In the last extension of her employment contract. 1998. 1993 to June 4. Further. thus: IN THE LIGHT OF ALL THE FOREGOING. that the respondent had rendered satisfactory service for a period of one year.. inter alia. The petitioner and the Philips Semiconductor Phils.14 The Ruling of the Labor Arbiter and the NLRC On June 26. however. She alleged. however. neither was she dismissed. considering that she had rendered more than six months of service to the petitioner. to qualify for contract renewal. was to maintain a performance rating of at least 3. which. upon the expiration of her contract. The NLRC explained that the respondent was a contractual employee whose period of employment was fixed in the successive contracts of employment she had executed with the petitioner. who had rendered less than seventeen months of service to the petitioner. the petitioner contended that the respondent had not been dismissed. these dialogues between the respondent and her line supervisor can be deemed as substantial compliance of the required notice and investigation. the complaint is hereby dismissed for lack of merit. on September 16.12 Thus. among others. cannot be said to have acquired regular status. Hence. neither was she accorded a chance to be heard. she was entitled to one month’s salary. 1997. The respondent is. there was no need for a notice or investigation. This was also reflected in the minutes of the meeting of April 6. The respondent’s employment was not terminated. Thus. she had worked for the petitioner for only twelve months. attendance and work attitude. Aggrieved.0 required average. issued a Resolution affirming the decision of the Labor Arbiter and dismissing the appeal.0.. her absences were covered by the proper authorizations. In the respondent’s case. the respondent’s contract of employment was no longer renewed. quality of work. based on output. NCR-0704263-93. The Labor Arbiter declared. the petitioner did not conduct any formal investigation before her employment was terminated. The NLRC further ruled that as a contractual employee. the respondent had already accumulated five unauthorized absences which led to the deterioration of her performance. the respondent appealed to the NLRC. 1993 between the petitioner and the union.habitual absenteeism. below the 3. Accordingly.15 The Labor Arbiter declared that the respondent.0 as a condition for her . she was already a regular employee and could not be terminated without any justifiable cause. docketed as NLRC Case No.13 On the other hand. The Complaint of the Respondent The respondent filed a complaint before the National Capital Region Arbitration Branch of the National Labor Relations Commission (NLRC) for illegal dismissal against the petitioner. and ultimately caused the non-renewal of her contract. the respondent was bound by the stipulations in her contract of employment which. Workers Union had agreed in their Collective Bargaining Agreement (CBA) that a contractual employee would acquire a regular employment status only upon completion of seventeen months of service. Moreover. The Labor Arbiter also ruled that the respondent cannot justifiably complain that she was deprived of her right to notice and hearing because her line supervisor had asked her to explain her unauthorized absences. ordered to extend to the complainant a send off award or financial assistance in the amount equivalent to one-month salary on ground of equity. a contractual employee was required to receive a performance rating of at least 3. Inc. which disqualified her for contract renewal. and regularization of employment. the Labor Arbiter rendered a decision dismissing the complaint for lack of merit. and since her infraction did not involve moral turpitude. Furthermore. but that her contract of employment for the period of April 4. as there was no valid cause for the termination of her employment.

and. Thus. According to the appellate court. 52149. It concluded that the respondent had attained regular status and cannot. Since she failed to meet the said requirement. the petitioner was justified in not renewing her contract. The CA ruled that under Article 280 of the Labor Code. especially considering that the respondent had performed satisfactorily for the past twelve months. docketed as CA-G. SP No. . the petitioner contends that the policy of hiring workers for a specific and limited period on an "as needed basis. contrary to the ruling of the Labor Arbiter. The CA further held that. Even casual employees shall be deemed regular employees if they had rendered at least one year of service to the employer. whether or not she was accorded the requisite notice and investigation prior to her dismissal. the petitioner’s contention that the respondent’s employment on "as the need arises" basis was illogical. the seventeenth-month probationary period under the CBA did not apply to her." as adopted by the petitioner. thus. according to the petitioner. The strict application of the contract of employment against the respondent placed her at the mercy of the petitioner. On October 11. If such stance were sustained. The Case Before the Court The petitioner filed the instant petition and raised the following issues for the court’s resolution: (a) whether or not the respondent was still a contractual employee of the petitioner as of June 4. The Case Before the Court of Appeals Dissatisfied. The CA held that the respondent’s sporadic absences upon which her dismissal was premised did not constitute valid justifiable grounds for the termination of her employment. Thus. neither is it prohibited. for the reversal of the resolutions of the NLRC. The CA noted that the respondent had been performing activities that were usually necessary and desirable to the petitioner’s business. (c) if so. On the first issue. she was also deprived of her right to due process. is not new.R. and that she had rendered thirteen months of service. (b) whether or not the petitioner dismissed the respondent from her employment. The CA ratiocinated that the bases upon which the NLRC and the Labor Arbiter founded their decisions were inappropriate because the CBA and the Minutes of the Meeting between the union and the management showed that the CBA did not cover contractual employees like the respondent. but on January 12.continued employment. 1993. an employee shall be deemed to have attained regular status when engaged to perform activities which are necessary and desirable in the usual trade or business of the employer. (d) whether or not the respondent is entitled to reinstatement and full payment of backwages as well as attorney’s fees. 2000. whose employees crafted the said contract. The appellate court further declared that the task of the respondent was hardly specific or seasonal. the court ruled. the NLRC resolved to deny the same. be dismissed except for just cause and only after due hearing. The periods fixed in the contracts of employment executed by the respondent were designed by the petitioner to preclude the respondent from acquiring regular employment status. whether broken or continuous. 1999. The petitioner filed a motion for reconsideration of the decision but on January 26. the appellate court rendered a decision reversing the decisions of the NLRC and the Labor Arbiter and granting the respondent’s petition. In fact. the respondent was not only dismissed without justifiable cause. regardless of the written and oral agreements between an employee and her employer. the CA issued a resolution denying the same. the respondent filed a petition for certiorari under Rule 65 before the Court of Appeals. the dialogues between the respondent and the line supervisor cannot be considered substantial compliance with the requirement of notice and investigation. then no employee would attain regular status even if employed by the petitioner for seventeen months or more. 1999. The respondent filed a motion for reconsideration of the resolution. The tribunal also ruled that a less punitive penalty would suffice for missteps such as absenteeism.

The petitioner stresses that the operation of its business as a semiconductor company requires the use of highly technical equipment which.the hiring of workers for a specific and limited period is a valid exercise of management prerogative. the petitioner may enter into specific limited contracts only for the duration of its clients’ peak demands. As testified to by the petitioner’s Head of Personnel Services. housekeeping and interoffice employee relationship. Thereafter. the following appraisal factors are considered by the respondent company as essential: (1) output (40%). efficiency. that the parties to an employment contract may agree otherwise. 16 The Court’s Ruling . the petitioner and the union agreed that contractual workers be hired as of December 31. which includes cooperation. particularly when the same is established by company policy or required by the nature of work to be performed. It produces the products upon order of its clients and does not allow such products to be stockpiled. Neither may the petitioner be penalized for agreeing to consider workers who have rendered more than seventeen months of service as regular employees. has set a standard of performance for workers as well as the level of skill. the conclusion of the CA that the policy adopted by it was intended to circumvent the respondent’s security of tenure is without basis. it had to resort to hiring contractual employees for definite periods because it is a semiconductor company and its business is cyclical in nature. The petitioner merely exercised a right granted to it by law and. 1992. as well as to set a reasonable period within which to determine such fitness for the job. production rate and manpower requirements are dictated by the volume of business from its clients and the availability of the basic materials. Consequently. The CA ignored the exception to this rule. in turn. attendance. calls for certain special skills for their use. Ms. (3) attendance (15%). in the exercise of its best technical and business judgment. during which time the worker is taught the manufacturing process and quality control. (2) quality (30%). Thus. competence and production which the workers must pass to qualify as a regular employee. and (4) work attitude (15%). … Among the factors considered (before a contractual employee becomes a regular employee) are output. The hiring of workers for a definite period to supplement the regular work force during the unpredictable peak loads was the most efficient. Thus. A worker has to undergo training. and work attitude. there is nothing essentially contradictory between a definite period of employment and the nature of the employee’s duties. discipline. no wrongful intent may be attributed to it. quality. Hence. After all. Peak loads due to cyclical demands increase the need for additional manpower for short duration. Its operation. The rate of 3. the petitioner. the union recognized the need to establish such training and probationary period for at least six months for a worker to qualify as a regular employee. The employer has the prerogative to set reasonable standards to qualify for regular employment. the petitioner asserts.0 was set as the passing grade. The petitioner contends that the CA misapplied the law when it insisted that the respondent should be deemed a regular employee for having been employed for more than one year. notwithstanding the fact that by the nature of its business. the worker is subjected to written and oral examinations to determine his fitness to continue with the training. the petitioner often experiences short-term surges in labor requirements. the worker’s efficiency and skill are monitored. just and practical solution to the petitioner’s operating needs. These factors determine the worker’s efficiency and productivity. Cecilia C. under their CBA. The orientation and initial training lasts from three to four weeks before the worker is assigned to a specific work station. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual course of business of the employer. Mallari: A worker’s efficiency and productivity can be established only after he has rendered service using Philips’ equipment over a period of time. According to the petitioner. After instructions. According to the petitioner. In rating the performance of the worker. the parties are forbidden from agreeing on a period of time for the performance of such activities. in the absence of any evidence of a wrongful act or omission.

dated May 8. 1992. The fact that the petitioner had rendered more than one year of service at the time of his (sic) dismissal only shows that she is performing an activity which is usually necessary and desirable in private respondent’s business or trade. which reads: Art. the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. It bears stressing that petitioner’s original contract of employment. That. Thus: It is apparent from the factual circumstances of this case that the period of employment has been imposed to preclude acquisition of tenurial security by petitioner. Article 280 was designed to put an end to the pernicious practice of making permanent casuals of our lowly employees by the simple expedient of extending to them temporary or probationary appointments.18 In tandem with Article 281 of the Labor Code. 1993. the provisions of their contract of employment notwithstanding. the appellate court applied Article 280 of the Labor Code of the Philippines. any employee who has rendered at least one year of service. and. 1992 to August 8. as amended. An employment shall be deemed to be casual if it is not covered by the preceding paragraph. therefore. but only with respect to such activity and while such activity exists. 1993. The work of petitioner is hardly "specific" or "seasonal. even if the performance is not continuous or merely intermittent. lastly. 21 If the employee has been performing the job for at least one year. The appellate court held that. another from January 7. Regular and Casual Employment. whether continuous or broken. Article 280 of the Labor Code of the Philippines was emplaced in our statute books to prevent the circumvention by unscrupulous employers of the employee’s right to be secure in his tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of regular employment defined therein. Hence. whether such service is continuous or broken. ad infinitum. 1993 to April 4. Provided. 1992. 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. had been extended through several contracts – one from October 13. – The provisions of written agreement to the contrary notwithstanding and regardless of the oral argument of the parties. 1993 to June 4. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. from April 5. 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.22 The law does not provide the qualification that the employee . The language of the law manifests the intent to protect the tenurial interest of the worker who may be denied the rights and benefits due a regular employee because of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on a casual or temporary status for as long as it is convenient to it." The petitioner is. in light of the factual milieu. a regular employee of private respondent. and (2) those casual employees who have rendered at least one year of service.In ruling for the respondent. 20 The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the business or trade of the employer.19 The two kinds of regular employees under the law are (1) those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer. 1992 to December 16.17 We agree with the appellate court. The private respondent’s prepared employment contracts placed petitioner at the mercy of those who crafted the said contract. the employment is also considered regular. 1993. 280. if not indispensability of that activity to the business of the employer. the respondent was already a regular employee on June 4. with respect to the activities in which they are employed.

Such statement is contrary to the letter and spirit of Articles 279 and 280 of the Labor Code. permit the former to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis. It. with the same chores. The petitioner’s reliance on our ruling in Brent School. v. be struck down or disregarded as contrary to public policy or morals. in rehiring petitioner. . She was assigned to wirebuilding at the transistor division. 1992 as production operator. The limited period specified in petitioner’s employment contract having been imposed precisely to circumvent the constitutional guarantee on security of tenure should. Such a continuing need for the services of the respondent is sufficient evidence of the necessity and indispensability of her services to the petitioner’s business. 279. and that there is nothing essentially contradictory between a definite period of employment and the nature of the employee’s duties.23 In this case. with an express statement that she may be reassigned at the discretion of the petitioner and that her employment may be terminated at any time upon notice. then. employment contracts ranging from two (2) to three (3) months with an express statement that his temporary job/service as mason shall be terminated at the end of the said period or upon completion of the project was obtrusively a convenient subterfuge utilized to prevent his regularization. the respondent was employed by the petitioner on May 8. the respondent had attained the regular status of her employment with the petitioner. case. The respondent’s re-employment under contracts ranging from two to three months over a period of one year and twenty-eight days. Zamora29 and reaffirmed in subsequent rulings is misplaced. 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. was but a catch-all excuse to prevent her regularization.27 Under Section 3. and is thus entitled to security of tenure as provided for in Article 279 of the Labor Code which reads: Art. We also ruled that the decisive determinant in "term employment" should not be the activity that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement and termination of their employment relationship. NLRC:26 Succinctly put. Article XVI of the Constitution. Security of Tenure.must first be issued a regular appointment or must be declared as such before he can acquire a regular employee status. 1993 or for one (1) year and twenty-eight (28) days. Inc. therefore. To uphold the contractual arrangement between PILMICO and petitioner would. likewise. precisely in light of the factual milieu of this case. We reiterate our ruling in Romares v. The worker should therefor be protected and insulated against any arbitrary deprivation of his job. evidenced bad faith on the part of PILMICO. The guarantee is an act of social justice. in effect. Inc. the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. 28 We reject the petitioner’s general and catch-all submission that its policy for a specific and limited period on an "as the need arises" basis is not prohibited by law or abhorred by the Constitution. inclusive of allowances. his dependents suffer as well. In the Brent School. it is the policy of the State to assure the workers of security of tenure and free them from the bondage of uncertainty of tenure woven by some employers into their contracts of employment. – In cases of regular employment. his job may possibly be his only possession or means of livelihood and those of his dependents. When a person loses his job. There is no dispute that the work of the respondent was necessary or desirable in the business or trade of the petitioner. thereby violating the employee’s security of tenure in their jobs. When a person has no property. to the same position. 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. 24 She remained under the employ of the petitioner without any interruption since May 8. we ruled that the Labor Code does not outlaw employment contracts on fixed terms or for specific period. The original contract of employment had been extended or renewed for four times. It was a clear circumvention of the employee’s right to security of tenure and to other benefits. 1992 to June 4.25 By operation of law.

NLRC case. Inc. NLRC. Workers Union and the petitioner in their CBA. Indeed. any worker hired by it for fixed terms of months or years can never attain regular employment status.31 we sustained the private respondents’ averments therein. or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent.). It could not then be said that petitioner and private respondents "dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. deposed that as agreed upon by the Philips Semiconductor (Phils. through Ms. to the unemployed. we also emphasized in the same case that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee. Technician. Workers Union ("Union"). dated May 16. Almost always. namely: 1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force. they agree to any terms of an employment contract just to get employed considering that it is difficult to find work given their ordinary qualifications. Material Handlers. between Philips and the Union that: ARTICLE I UNION RECOGNITION "Section 1. security of tenure has no value. Operators. and excluded these workers from the bargaining unit of regular rank-and-file employees. Mallari. Machinists. hence. the Philips Semiconductors (Phils. the Head of Personnel Services of the petitioner. ad infinitum. contractual employees hired before December 12. Metro Manila: Janitors. they should be struck down or disregarded as contrary to public policy and morals. Storekeepers. In the Romares v. Inventory Controllers. depending upon the needs of its customers.). QA Inspectors. the petitioner. Sr. 1993 shall acquire regular employment status after seventeen (17) months of satisfactory service. Technicians. 32 We reject the petitioner’s submission that it resorted to hiring employees for fixed terms to augment or supplement its regular employment "for the duration of peak loads" during short-term surges to respond to cyclical demands. in its best business judgment. thus: [I]t could not be supposed that private respondents and all other so-called "casual" workers of [the petitioner] KNOWINGLY and VOLUNTARILY agreed to the 5-month employment contract. 30 None of these criteria has been met in this case. domestic and international. Store helpers. Cannery workers are never on equal terms with their employers. duress. Inc. Sr. Draftsmen.However. we cited the criteria under which "term employment" cannot be said to be in circumvention of the law on security of tenure. Employees Covered: The Company hereby recognizes the Union as the exclusive bargaining representative of the following regular employees in the Factory at Las Piñas. Their freedom to contract is empty and hollow because theirs is the freedom to starve if they refuse to work as casual or contractual workers. . it may hire and retire workers on fixed terms. QA Inspectors. Production Controllers. 1993. Under the petitioner’s submission. duly recognized the right of Philips. continuous or broken: 5. Indeed. Packers. through their exclusive bargaining agent. in Pure Foods Corporation v. Q: What was the response of Philips’ regular employees to your hiring of contractual workers in the event of peak loads? A: Philip’s regular rank-and-file employees. Thus. or 2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. Cecilia C. However. it is provided under the Collective Bargaining Agreement. to hire contractual workers.

the petitioner’s reliance on the CBA is misplaced. In reiteration. Under the agreement. Q: May a contractual employee become a regular employee of the Philips? A: Yes. may terminate the contract. The point is. as ratiocinated by the appellate court in its assailed decision: Obviously. even after the lapse of seventeen months. private respondent. who have rendered seventeen months of satisfactory service. Indubitably. For. This cannot be allowed. it is the express mandate of the CBA not to include contractual employees within its coverage. delaying the regularization of contractual employees. such that when the need ceases. dated April 6. be to permit employers to avoid the necessity of hiring regular or permanent employees. petitioner was just a mere contractual employee. shall be given regular status. dated August 30. A copy of the Minutes of the Meeting ("Minutes. 6. Draftsmen. should be placed in a wobbly status. The illogic of the petitioner’s incongruent submissions was exposed by the appellate court in its assailed decision. evidencing the agreement between Philips and the Union has been submitted as Annex "2" of Philips’ Position Paper. is certainly untenable. at its option. Sr. 1993. she became a regular employee as soon as she had completed one year of service. nothing could be more unjust than to exclude contractual employees from the benefits of the CBA on the premise that the same contains an exclusionary clause while at the same time invoke a collateral agreement entered into between the parties to the CBA to prevent a contractual employee from attaining the status of a regular employee.Controllers. Such being the case." for brevity). except probationary and Casual/Contractual Employees. thus: The contention of private respondent that petitioner was employed on "as needed basis" because its operations and manpower requirements are dictated by the volume of business from its client and the availability of the basic materials. contractual workers hired before 12 December 1993. This is not sanctioned by law. and Servicemen. under the CBA. was attached as Annex "1" to Philip’s Position Paper. dated April 6. It is so impressed with public interest that labor contracts must yield to the common good. employers deny their right to security of tenure. which is usually desirable and necessary in the usual business. whether continuous or broken. 33 In fine. It cannot be invoked as a reason why a person performing an activity. 1993. should bind petitioner as well as other contractual employees. between the Union and Philips. all of whom do not belong to the bargaining unit. By hiring employees indefinitely on a temporary or casual status. The service rendered by a contractual employee may be broken depending on production needs of Philips as explained earlier. While at the start. Indeed. 1993. dated May 16. the regularization of a contractual or even a casual employee is based solely on a satisfactory service of the employee/worker for seventeen (17) months and not on an "as needed basis" on the fluctuation of the customers’ demands for its products." A copy of the CBA. in effect. we see no reason why an agreement between the representative union and private respondent. It is not difficult to see that to uphold the contractual arrangement between private respondent and petitioner would. …34 Even then. 1993. If such is the case. then we see no reason for private respondent to allow the contractual employees to attain their regular status after they rendered service for seventeen months. . the operation of every business establishment naturally depends on the law of supply and demand. the operation of private respondent would still be dependent on the volume of business from its client and the availability of basic materials. the relation between capital and labor is not merely contractual.

The seventeen months provided by the "Minutes of Meeting" is obviously much longer. shall be considered a regular employee. The employer is bound to exercise caution in terminating the services of his employees. is too harsh a penalty. thus: "Those dialogues of the complainant with the Line Supervisor.. We are in full accord with the following ratiocinations of the appellate court in its assailed decision: As to the alleged absences. However. [p.. we are convinced that the same do not constitute sufficient ground for dismissal. 90 SCRA 391 [1979]) . therefore. Dismissal is just too stern a penalty. the Constitution guarantees the right of workers to "security of tenure. Dismissals must not be arbitrary and capricious. Besides. the aforementioned CBA should be binding only upon private respondent and its regular employees who were duly represented by the bargaining union. this is not without limitations. we are convinced that it is erroneous for the Commission to uphold the following findings of the Labor Arbiter. whether such service is continuous or broken. Inc. Perfection cannot. providing that contractual employees shall become regular employees only after seventeen months of employment. The complainant did not avail of the opportunity to explain her side to justify her shortcomings. constitutes the law between the parties. However. 92 SCRA 412 [1979])." The misery and pain attendant to the loss of jobs then could be avoided if there be acceptance of the view that under certain circumstances of the case the workers should not be deprived of their means of livelihood. Such a provision runs contrary to law not only because contractual employees do not form part of the collective bargaining unit which entered into the CBA with private respondent but also because of the Labor Code provision on regularization. The law explicitly states that an employee who had rendered at least one year of service. The period set by law is one year. whatever missteps may be committed by labor ought not to be visited with a consequence so severe. The principle is well settled that the law forms part of and is read into every contract without the need for the parties expressly making reference to it. …35 On the second and third issues. NLRC36 that: Dismissal is the ultimate penalty that can be meted to an employee. the power to dismiss is a formal prerogative of the employer. Given the factual milieu in this case. (Meracap v. II. The agreement embodied in the "Minutes of Meeting" between the representative union and private respondent. during its lifetime. We do agree that an employee may be dismissed for violation of reasonable regulations/rules promulgated by the employer. Employers should respect and protect the rights of their employees which include the right to labor. substantially. be demanded.] 680) Finally. the fact that petitioner was repeatedly given a contract shows that she was an efficient worker and. should be retained despite occasional lapses in attendance. She cannot now complain about deprivation of due process. Such being the rule. Inc. whatever missteps may have been committed by the worker ought not to be visited with a consequence so severe such as dismissal from employment." Of course. Vol.. three (3) absences in May 1993 and four (4) absences in June 1993. especially. (Azucena.37 Neither can the conferences purportedly held between the respondent and the line supervisor be deemed substantial compliance with the requirements of notice and investigation.The CBA. even if true. on absences. we emphasized in PLDT v. For. The Labor Code. 1996 ed. Where a penalty less punitive would suffice. the respondent’s dismissal from employment for incurring five (5) absences in April 1993. stand for the notice and investigation required to comply with due process. we agree with the appellate court that the respondent was dismissed by the petitioner without the requisite notice and without any formal investigation. International Ceramics Manufacturing Co. after all. (Liberty Cotton Mills Workers Union v.. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Liberty Cotton Mills. cannot bind petitioner. No less than the Supreme Court mandates that where a penalty less punitive would suffice.

and second. having been compelled to come to court to protect her rights. Puno. A conference is not a substitute for the actual observance of notice and hearing. This is his means of livelihood. and Tinga. SP No. she was dismissed in the absence of a just cause. first. Costs against the petitioner. National Labor Relations Commission. He cannot be deprived of his labor or work without due process of law. we deem it proper to order the reinstatement of petitioner to her former job and the payment of her full backwages. JJ..38 IN LIGHT OF ALL THE FOREGOING.. The petition at bar is DENIED. (Batangas Laguna Tayabas Bus Co.R. (Chairman). The right of a person to his labor is deemed to be his property within the meaning of the constitutional guarantee. SO ORDERED.To rule that the mere dialogue between private respondent and petitioner sufficiently complied with the demands of due process is to disregard the strict mandate of the law. In pursuance of Article 279 of the Labor Code. Also. concur. the assailed decision of the appellate court in CA-G. Quisumbing. v. (Pepsi Cola Bottling Co. v. 210 SCRA 277 [1992]) The failure of private respondent to give petitioner the benefit of a hearing before she was dismissed constitutes an infringement on her constitutional right to due process of law and not to be denied the equal protection of the laws. Court of Appeals. Austria-Martinez. we grant petitioner’s prayer for attorney’s fees. Inc. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION . she was not afforded procedural due process. 52149 is AFFIRMED. the court concludes that petitioner’s dismissal is illegal because. 71 SCRA 470 [1976]) All told.

They maintained that respondents were hired as project employees for the construction of the LRT/MRT Line 2 Package 2 and 3 Project. but that the contracts may be renewed. 1 dated 28 July 2005. ELMER GACULA. vs. The Court of Appeals.5 On 15 April 2002. HANJIN and respondents purportedly executed contracts of employment. respectively.. in its assailed Decision. Hanjin dismissed respondents from employment. with the exception of Ruel Calda. 2 promulgated by the National Labor Relations Commission (NLRC) on 7 May 2004. Respondents claimed that at the time of their dismissal. ENRIQUE DAGOTDOT AND RUEL CALDA. and La Mesa Dam. 170181 June 26. HANJIN had several construction projects that were still in progress. J. who as a warehouseman was required to work in HANJIN's main office. assailing the Decision. in which it was clearly stipulated that the respondents were to be hired as project employees for a period of only three months. Manila International Port in 1994-1996.petitioners. reversing the Decision. Batangas Port in 1996-1998.respondents. hereunder specified: Position Tireman Crane Operator Welder Welder Warehouseman Date of Employment 7 March 2000 1992 1995 September 1994 26 January 19963 Felicito Ibañez Elmer Gacula Enrique Dagotdot Aligwas Carolino Ruel Calda Respondents stated that their tasks were usual and necessary or desirable in the usual business or trade of HANJIN. respondents named the North Harbor project in 1992-1994. Elmer Gacula. RAB-IV-04-15515-02-RI. for illegal dismissal with prayer for reinstatement and full backwages against petitioners. LTD. to wit: Article II . docketed as NLRC Case No. Ruel Calda. 2008 HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO. Petitioner HANJIN is a foreign company duly registered with the Securities and Exchange Commission to engage in the construction business in the Philippines. Enrique Dagotdot. by HANJIN. and four other co-workers filed a complaint before the NLRC. ALIGWAS CAROLINO. HAK KON KIM and/or JHUNIE ADAJAR.G. 4 Among the various construction projects to which they were supposedly assigned. Petitioners Hak Kon Kim and Jhunie Adajar were employed as Project Director and Supervisor. the Batangas Pier. No. DECISION CHICO-NAZARIO. respondents Felicito Ibañez. On 11 April 2002. respondents alleged that HANJIN hired them for various positions on different dates. rendered by the Court of Appeals. declared that respondents are regular employees who were illegally dismissed by petitioner Hanjin Heavy Industries and & Construction Company.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. Limited (HANJIN). Aligwas Carolino. Respondents additionally averred that they were employed as members of a work pool from which HANJIN draws the workers to be dispatched to its various construction projects. In their Position Paper dated 29 July 2002.R. FELICITO IBAÑEZ. such as Metro Rail Transit (MRT) II and MRT III. and continued to hire employees to fill the positions vacated by the respondents. 6 Petitioners denied the respondents' allegations.

as well as the terms of their contracts. In their Reply13 dated 27 August 2002.020. with the words "completion bonus" written at the lower left corner of each page.020.83 88.020.7 However. Felicito Ibañez 2. 9 Finally. petitioners failed to furnish the Labor Arbiter a copy of said contracts of employment. Elmer A. It also noted that a termination report should be presented after the completion of every project or a phase thereof and not just the completion of one of these projects. 11 Petitioners attached copies of the Quitclaims. Copies of the employees' rules and regulations were posted on the bulletin boards of all HANJIN campsite offices.83 .020. Respondents were among the project employees who were thereafter laid off. as shown in the Establishment Termination Report filed by HANJIN before the Department of Labor and Employment (DOLE) Regional Office (IV) in Cainta. that: WHEREFORE.020.83 88. Rizalino De Vera 4. premises considered. Carolino Aligwas P 88. Hak Kon Kim. dated 30 April 2003. These Quitclaims also contained Clearance Certificates which confirmed that the employees concerned were cleared of all accountabilities at the close of the working hours on 15 April 2002. respondents vehemently refuted having signed any written contract stating that they were project employees.8 Petitioners further emphasized that prior to 15 April 2002. Rizal on 11 April 2002. petitioners insist that in accordance with the usual practice of the construction industry. notified respondents of the company's intention to reduce its manpower due to the completion of the LRT/MRT Line 2 Package 2 and 3 Project. guilty of illegal dismissal >2) Ordering respondent to reinstate all the complainants to positions previously occupied by them with full backwages from the time compensation was withheld from them up to date of actual reinstatement in the following amount (as of date of this decision): 1. 1) Declaring respondent HANJIN HEAVY INDUSTRIES & CONSTRUCTION CO. rules and regulations. It ruled that HANJIN's allegation that respondents were project employees was negated by its failure to present proof thereof. Gacula 3. 14 The Labor Arbiter ordered in its Decision. judgment is hereby rendered as follows. The Labor Arbiter found merit in the respondents' complaint and declared that they were regular employees who had been dismissed without just and valid causes and without due process. Enrique Dagotdot 5.TERM OF AGREEMENT This Agreement takes effect xxx for the duration of three (3) months and shall be considered automatically renewed in the absence of any Notice of Termination by the EMPLOYER to the PROJECT EMPLOYEE.12 executed by the respondents. employees. not project.83 88.10 To support this claim. HANJIN's Project Director.depending upon the progress of the project. Petitioners asserted that respondents were duly informed of HANJIN's policies.83 88. a completion bonus was paid to the respondents. they offered as evidence payroll records for the period 4 April 2002 to 20 April 2002. LTD. ThisAGREEMENT automatically terminates at the completion of the project or any particular phase thereof. The Labor Arbiter further construed the number of years that respondents rendered their services for HANJIN as an indication that respondents were regular. which uniformly stated that the latter received all wages and benefits that were due them and released HANJIN and its representatives from any claims in connection with their employment.

18 The dispositive part of the Decision dated 7 May 2004 of the NLCR states that: WHEREFORE. the appellate court ruled that respondents were regular employees and upheld the Labor Arbiter's finding that they were illegally dismissed. or the total sum of P450. The NLRC reversed the Labor Arbiter's Decision dated 30 April 2003. 17 The NLRC gave probative value to the Termination Report submitted by HANJIN to the DOLE.83 88. dated 7 May 2004. they still contended that the absence of respondents' contracts of employment does not vest the latter with regular status.00 as exemplary damages.500.47 3) In lieu of reinstatement. unequivocally informing them of their status as project employees.000.00 19.500.00 4) Ordering respondent to pay each complainant P50.500.000.00 26.83 88.000. the time when construction work on the MRT started.020. The appellate court looked with disfavor at the change in HANJIN's initial position before the Labor Arbiter-from its initial argument that respondents executed employment contracts. receipts signed by respondents for their completion bonus upon phase completion.00 45.00 58. 20 The decretal portion of the Decision of the Court of Appeals reads: . The NLRC also observed that the records were devoid of any proof to support respondents' allegation that they were employed before 1997.00 All other claims are DISMISSED for lack of merit. the decision subject of appeal is hereby REVERSED and SET ASIDE and a new one is entered DISMISSING complainants' complaint for lack of merit. it overruled the Labor Arbiter's award of moral and exemplary damages. Nonetheless.000. in view of the foregoing.6. Emphasizing that the employer had the burden of proving the legality of the dismissal.500. The Court of Appeals. Additionally.000.00. respondent is ordered to pay complainants their separation pay in the following sum: Felicito Ibañez Elmer A. Carmelito Dalumangcad Total 88.500.00 P390. petitioners discarded their earlier claim that respondents signed employment contracts. and 5) Ordering respondent to pay complainants litigation expenses in the sum of P30.020. Lastly.000. the Court of Appeals reversed the NLRC Decision.000. it adjudged the Termination Report as inconclusive proof that respondents were project employees. adopted the NLRC's deletion of the award of damages. respectively. Gacula Rizaliano De Vera Enrique Dagotdot Carolino Aligwas Ruel Calda Roldan Lanojan Pascual Caranguian Carmelito Dalumangcad Total P 19.00 19.83 88. Pascual Caranguian 9.000.83 P792. 187.000. to its modified argument during its appeal before the NLRC-that respondents could still be categorized as project workers despite the absence of contracts of employment. 19 On appeal. and pronounced that the respondents were project employees who were legally terminated from employment. In their Notice of Appeal/Memorandum Appeal 16 dated 5 July 2003.00 71.15 Petitioners filed an appeal before the NLRC.00 for moral damages and P30. Roldan Lanojan 8.020.00 78.020.500.00 52. and the Quitclaims executed by the respondents in favor of HANJIN. however.00 and P270. Ruel Calda 7.

in which the following issues are raised: I WHETHER OR NOT THE FINDINGS OF THE HONORABLE COURT OF APPEALS ARE MERE CONCLUSIONS WITHOUT DELVING INTO THE RECORDS OF THE CASE AND EXAMINE (sic) FOR ITSELF THE QUESTIONED FINDINGS OF THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION CONTRARY TO THE RULING IN THE CASE OF AGABON VS. Nevertheless. as the case may be. this Court is obliged to resolve it due to the incongruent findings of the NLRC and those of the Labor Arbiter and the Court of Appeals. the factual findings of the Court of Appeals are binding upon the Supreme Court. One exception to this rule is when the factual findings of the former are contrary to those of the trial court or the lower administrative body. III WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING THE PERTINENT PROVISIONS OF POLICY INSTRUCTIONS NO. but not with respect to the awards for moral damages or for exemplary damages. IF PROPERLY CONSIDERED. WOULD RESULT IN A DIFFERENT CONCLUSION.22 The Petition is without merit. The decision of the Labor Arbiter is herebyREINSTATED relative to the award to petitioners of full backwages. 23 Article 280 of the Labor Code distinguishes a "project employee" from a "regular employee" thus: Article 280. and litigation expenses. AS AMENDED BY DEPARTMENT ORDER NO. as they hereby are. the present Petition. II WHETHER OR NOT THE HONORABLE COURT OF APPEALS MANIFESTLY OVERLOOKED CERTAIN RELEVANT FACTS WHICH. NLRC. THUS. 19 SERIES OF 1993 IN RELATION TO ARTICLE 280 OF THE LABOR CODE IN CONSIDERING WHETHER OR NOT RESPONDENTS ARE PROJECT EMPLOYEES. The main question that needs to be settled-whether respondents were regular or project employees-is factual in nature. .UPON THE VIEW WE TAKE OF THIS CASE. As a general rule. REVERSED and SET ASIDE. IV THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS WERE ILLEGALLY DISMISSED. 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. both of which are hereby DELETED. 442 SCRA 573. the challenged decision and resolution of the NLRC must be. separation pay in lieu of reinstatement. 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. Regular and Casual Employment-The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties.21 Hence. Without costs in this instance. 20. AL. ET.

In this case. they cannot be considered project employees. for failure of petitioners to substantiate their claim that respondents were project employees. In another case. it has been construed by this Court as a red flag in cases involving the question of whether the workers concerned are regular or project employees. distinct from the other undertakings of the company. automatically renewed in the absence of notice. petitioners now claim that due to a lapse in management procedure. whether such service is continuous or broken.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. v. In Caramol v. Neither did they inform respondents of the nature of the latters' work at the time of hiring. Raycor v. we are constrained to declare them as regular employees. National Labor Relations Commission. National Labor Relations Commission. is defined in an employment agreement and is made clear to the employees at the time of hiring.) From the foregoing provision. petitioners did not have that kind of agreement with respondents. In their appeal before the NLRC until the present. as well as the particular work/service to be performed. v. Aircontrol Systems. which stated the duration of the project. especially after they alleged in their pleadings the existence of such contracts stipulating that respondents' employment would only be for the duration of three months. Such duration. 25 the Court has held that the length of service or the re-hiring of construction workers on a project-to-project basis does not confer upon them regular employment status. National Labor Relations Commission. v. the petitioners' failure to produce respondents' contracts of employment was already noted. the scope and duration of which has been determined and made known to the employees at the time of the employment. Respondents denied having executed such contracts with HANJIN. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. That. nonetheless.32 this Court took note of the fact that the employer was unable to present employment contracts signed by the workers. Inc. Bernardo 31 and Audion Electric Co. no such employment contracts were executed.28 and later reiterated in Salinas. 26 Should the terms of their employment fail to comply with this standard. the principal test for determining whether particular employees are properly characterized as "project employees" as distinguished from "regular employees" is whether or not the project employees were assigned to carry out a "specific project or undertaking. and terminated at the completion of the project. In Grandspan Development Corporation v. this Court considered it crucial that the employees were informed of their status as project employees: The principal test for determining whether employees are "project employees" or "regular employees" is whether they are assigned to carry out a specific project or undertaking. the absence of a written contract does not remove respondents from the ambit of being project employees. Employees who are hired for carrying out a separate job. the duration and scope of which are specified at the time they are engaged for that project. (Emphasis supplied. Ramirez. 30 While the absence of a written contract does not automatically confer regular status.. Hence.27 which also involved a construction company and its workers.24 In a number of cases. National Labor Relations Commission." During the proceedings before the Labor Arbiter. without any force.29 the Court markedly stressed the importance of the employees' knowing consent to being engaged as project employees when it clarified that "there is no question that stipulation on employment contract providing for a fixed period of employment such as `project-to-project' contract is valid provided the period was agreed upon knowingly and voluntarily by the parties. are properly treated as project employees and their services may be lawfully terminated upon the completion of a project. Jr. Inc. duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent x x x.33 this Court refused to give any weight to the employment . any employee who has rendered at least one year service. since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred." the duration and scope of which were specified at the time the employees were engaged for that project. In Abesco Construction and Development Corporation v.

while not employed and awaiting engagement. Project employees who have become regular shall be entitled to separation pay. (a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable. In cases where this Court ruled that construction workers repeatedly rehired retained their status as project employees. may be considered as indicators that an employee is a project employee. the employers were able to produce employment contracts clearly stipulating that the workers' employment was coterminous with the project to support their claims that the employees were notified of the scope and duration of the project.3(a) of Department Order No. is defined in an employment agreement and is made clear to the employee at the time of hiring. (f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies. among others. as well as the specific work/service to be performed. using the prescribed form on employees' terminations/dismissals/suspensions. It is doctrinally entrenched that in illegal dismissal cases. is free to offer his services to any other employer. 35 Absent any other proof that the project employees were informed of their status as such.Either one or more of the following circumstances. issued by the DOLE: 2. which contained the signature of the president and general manager. entitled Guidelines Governing the Employment of Workers in the Construction Industry. 19. 19. such project employee may not be considered regular. is understood to be that which must necessarily come. (b) Such duration. it will be presumed that they are regular employees in accordance with Clause 3. such a contract is evidence that respondents were informed of the duration and scope of their work and their status as project employees. although it may not be known exactly when.2 Indicators of project employment. (d) The employee. but not the signatures of the employees. where no other evidence was offered.2(e) and (f) of Department Order No. (e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work. Series of 1993. consistent and convincing evidence that a dismissal was valid. . A "day" as used herein.) Petitioners call attention to the fact that they complied with two of the indicators of project employment. This means that where the final completion of a project or phase thereof is in fact determinable and the expected completion is made known to the employee. even though the absence of a written contract does not by itself grant regular status to respondents.contracts offered by the employers as evidence. which states that: a) Project employees whose aggregate period of continuous employment in a construction company is at least one year shall be considered regular employees. in the absence of a "day certain" agreed upon by the parties for the termination of their relationship.) . (Emphasis provided. notwithstanding the one-year duration of employment in the project or phase thereof or the one-year duration of two or more employments in the same project or phase of the project. as prescribed under Section 2. the absence of an employment contract puts into serious question whether the employees were properly informed at the onset of their employment status as project employees. (c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged. In this case. 34 Hence. accurate. Series of 1993. the employer has the burden of proving with clear. (Emphasis provided.

An undertaking by the employer to pay a completion bonus shall be an indicator that an employee is a project employee. petitioners could simply present as evidence documents and records in their custody to disprove the same. and after their previous continuous employment for other projects. 40 Petitioners did not even allege how the "completion bonus" was to be computed or the conditions that must be fulfilled before it was to be given. (Emphasis supplied. however. and La Mesa Dam. petitioners failed to present evidence showing that they undertook to pay respondents such a bonus upon the completion of the project. Rizal on 11 April 2002 signifies that respondents' services were engaged merely for the LRT/MRT Line 2 Package 2 and 3 Project. a lone Termination Report filed by petitioners only upon the termination of the respondents' final project. The failure of an employer to file a Termination Report with the DOLE every time a project or a phase thereof is completed indicates that respondents were not project employees.38 In this case.. Project employees who are separated from work as a result of the completion of the project or any phase thereof in which they are employed are entitled to the pro-rata completion bonus if there is an undertaking by for the grant of such bonus. Department Order No. Batangas Port in 1996-1998. 39 The amount paid to each employee was equivalent to his fifteen-day salary. petitioners' argument fails to persuade this Court. instead.e. Assuming that petitioners actually paid respondents a completion bonus. if paid as a mere afterthought. petitioners presented payroll records for the period 4 April 2002 to 20 April 2002. which do not bear respondents' names. If respondents were actually project employees. the Batangas Pier. payroll for such projects or termination reports. Series of 1993. the employee may be considered a non-project employee.2(f) of Department Order No. Series of 1993. The pro-rata completion bonus may be based on the industry practice which is at least the employee's one-half (1/2) month salary for every 12 months of service and may be put into effect for any project bid (in case of bid projects) or tender submitted (in case of negotiated projects) thirty (30) days from the date of issuances of these Guidelines. cannot be used to determine whether or not the employment was regular or merely for a project. is not only unconvincing. 19.Petitioners argue that the Termination Report filed before the DOLE Regional Office (IV) in Cainta. whose work is necessary and desirable in the former's line of business. by treating them as though they are part of a work pool from which workers could be continually drawn and then assigned to various projects and thereafter denied regular status at any time by the expedient act of filing a Termination Report. 37 Employers cannot mislead their employees. as provided under Section 2. Petitioners were not able to offer evidence to refute or controvert the respondents' claim that they were assigned to various construction projects. morals. but even suspicious. the employee may be considered a non-project employee. Petitioners.) . This would constitute a practice in which an employee is unjustly precluded from acquiring security of tenure. Given the particular facts established in this case. as in this case.4 Completion of the project. Otherwise. chose to remain vague as to the circumstances surrounding the hiring of the respondents. 19. This Court finds it unusual that petitioners cannot even categorically state the exact year when HANJIN employed respondents. only the last and final termination of petitioners was reported to the DOLE. Where there is no such undertaking. petitioners should have filed as many Termination Reports as there were construction projects actually finished and for which respondents were employed. Petitioners insist that the payment to the respondents of a completion bonus indicates that respondents were project employees. particularly the North Harbor Project in 1992-1994. deny receiving any such amount. with the words "completion bonus" written at the lower left corner of each page. contrary to public policy. Thus. good customs and public order. A completion bonus. an employer may defeat the workers' security of tenure by paying them a completion bonus at any time it is inclined to unjustly dismiss them. to wit: 3. provides that in the absence of an undertaking that the completion bonus will be paid to the employee. Manila International Port in 1994-1996. Respondents. i. To support their claim.36 Had respondents' allegations been false. It also bears to note that petitioners did not present other Termination Reports apart from that filed on 11 April 2002.

SP No. They are thus ineffective to bar claims for the full measure of a worker's legal rights. quitclaims and waivers or releases are looked upon with disfavor and frowned upon as contrary to public policy. through the twin requirements of notice and hearing. SO ORDERED. and is not based on a fifteen-day period. and litigation expenses. the scales of justice must be tilted in favor of the latter. records failed to show that HANJIN afforded respondents. 87474.4 of Department Order No.42 In this case. this Court finds that the payments termed as "completion bonus" are not the completion bonus paid in connection with the termination of the project. as regular employees. therefore. A completion bonus is paid in connection with the completion of the project.45 IN VIEW OF THE FOREGOING. Finally. Certainly. . promulgated on 28 July 2005. who are regular employees. one important factor that must be taken into account is the consideration accepted by respondents. As a rule.44 For these reasons. in the instant case. particularly when the following conditions are applicable: 1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person. the Quitclaims which they signed cannot prevent them from seeking claims to which they are entitled. bears no relevance to a completion bonus. the period from 4 April 2002 to 20 April 2002. illegal. and are. the amount must constitute a reasonable settlement equivalent to the full measure of their legal rights. Respondents were not served notices informing them of the particular acts for which their dismissal was sought. Respondents. therefore. the amount paid to each employee as his completion bonus was uniformly equivalent to his fifteen-day wages. This Court AFFIRMS the assailed Decision of the Court of Appeals in CA-G. the instant Petition is DENIED. are entitled to backwages and separation pay and.Furthermore. Series of 1993. the completion bonus is at least the employee's one-half month salary for every twelve months of service.R. Section 3. or (2) where the terms of settlement are unconscionable on their face. separation pay.43 Due to petitioners' failure to adduce any evidence showing that petitioners were project employees who had been informed of the duration and scope of their employment. they were unable to discharge the burden of proof required to establish that respondents' dismissal was legal and valid. Furthermore. due process prior to their dismissal. without consideration of the number of years of service rendered. Limited. therefore. Costs against the petitioners. 19. Secondly. the Quitclaims signed by the respondents do not appear to have been made for valuable consideration. declaring that the respondents are regular employees who have been illegally dismissed by Hanjin Heavy Industries & Construction Company. provides that based on industry practice. as stated in the payrolls. Finally. after examining the payroll documents submitted by petitioners. the Quitclaims which the respondents signed cannot bar them from demanding what is legally due them as regular employees. entitled to full backwages. Nor were they required to give their side regarding the charges made against them. the respondents' dismissal was not carried out in accordance with law and was. First of all. it is a well-settled doctrine that if doubts exist between the evidence presented by the employer and that by the employee. respondents are to be considered regular employees of HANJIN. 41To determine whether the Quitclaims signed by respondents are valid.

V000714-2000. TIBUS. BAREDO. VISCA and RAFFIE G. petitioners.: Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision1 dated July 30. No. 78620 which reversed and set aside the Resolution dated February 27.R. 2004 of the Court of Appeals (CA) in CA-G. FEDERICO F. JOHNNY G. The present controversy stemmed from five individual complaints3 for illegal . 2005 which denied petitioners' Motion for Reconsideration. and the CA Resolution2 dated February 2. VISCA.R. respondents.Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. 2003 of the National Labor Relations Commission (NLRC) in NLRC Case No. VISCA. 2008 COCOMANGAS HOTEL BEACH RESORT and/or SUSAN MUNRO. 167045 August 29. vs. J. RICHARD G. SP No. RONALD Q. DECISION AUSTRIA-MARTINEZ.

816. John Munro. 1999 by Federico F. In addition to reinstatement with payment of full backwages. as instructed. Tibus Richard G. 1996 April 1988 March 27. Aklan. The dispositive portion of the NLRC Decision reads: WHEREFORE. Visca and Raffie G. in addition to 10% attorney's fees. when not less than ten workers were subsequently hired by petitioners to do repairs in two cottages of the resort and two workers were retained after the completion without respondents being allowed to resume work. 2000. 2002. VI of the National Labor Relations Commission (NLRC) in Kalibo. informed them not to report for work since the ongoing constructions and repairs would be temporarily suspended because they caused irritation and annoyance to the resort's guests. Maria Nida Iñigo-Tañala. Tibus. On August 29. and cost-of-living allowance. Visca (Visca). On June 30. the NLRC rendered a Decision.5 petitioners denied any employer-employee relationship with respondents and countered that respondent Visca was an independent contractor who was called upon from time to time when some repairs in the resort facilities were needed and the other respondents were selected and hired by him. the decision dated June 30. Ronald Q. 13 th month pay. when respondent Visca later discovered that four new workers were hired to do respondents' tasks. respondents prayed for payment of premium pay for rest day. 2000 of the Labor Arbiter is VACATED and SET ASIDE and a new decision rendered declaring the Illegal Dismissal of the complainant (sic) and ordering respondent Susan Munro to pay the complainants the following: 1. they did not report for work the succeeding days. 1993 November 9. Barredo Ronald Q. that there was no illegal dismissal but completion of projects. he confronted petitioner Munro who explained that respondents' resumption of work was not possible due to budgetary constraints. 1999. not regular employees. 2000. 1993 tasked with the maintenance and repair of the resort facilities. 1987 April 23. holding that respondent Visca was an independent contractor and the other respondents were hired by him to help him with his contracted works at the resort. No comment thereon was filed by the petitioners. In their consolidated Position Paper. on May 8.4 respondents alleged that they were regular employees of petitioners. Federico F.8 setting aside the Decision of the LA and ordering the payment to respondents of backwages computed from May 8. with designations and dates of employment as follows: Name Federico F. Susan Munro (petitioners) before Sub-Regional Arbitration Branch No. respondents filed a Memorandum of Appeal 7 with the NLRC. subsequently visited respondent foreman Visca and informed him that the work suspension was due to budgetary constraints. In their Position Paper. they filed their individual complaints for illegal dismissal. Visca Johnny G. Visca Raffie G. Visca (respondents) against Cocomangas Hotel Beach Resort and/or its owner-manager. plus moral and exemplary damages and attorney's fees. husband of petitioner Susan Munro. Johnny G. 1999 to July 31. that respondents were project workers.53 . 13 th month pay and service incentive leave pay for three years. the Front Desk Officer/Sales Manager. Richard G. On August 9.dismissal filed on June 15. service incentive leave pay. 2002. Visca P 288. Visca Foreman Carpenter Mason Carpenter Mason/Carpenter Designation Date Employed October 1. the Labor Arbiter (LA) rendered a Decision 6 dismissing the complaint. Barredo.

000. 2004. Raffie C. Barredo 3. (c) respondents were paid their holiday and overtime pay. Nonetheless. petitioners filed a Motion for Reconsideration. On November 18.2. and (d) respondents had been continuously in petitioners' employ from three to twelve years and were all paid by daily wage given weekly. On July 30. 11 No opposition or answer to petitioners' motion for reconsideration and supplement was filed by respondents despite due notice. SO ORDERED. at the least. (b) whether or not the respondents' dismissal from work was based on valid grounds.00. Johnny G. Cebu City for the purpose of UPDATING the award promulgated in its Decision dated August 29.47 P1.85 P 211.10 Petitioners also filed a Supplemental to their Motion for Reconsideration. The instant case is hereby REMANDED to the 4th Division NLRC.768. It took into account the following: (a) respondent Visca was reported by petitioners as an employee in the Quarterly Social Security System (SSS) report. judgment is hereby rendered by us REVERSING and SETTING ASIDE the NLRC Resolution dated February 28. Tibus 4. Richard C. the NLRC made a complete turnabout from its original decision and issued a Resolution13 dismissing the complaint. REINSTATING the NLRC Decision dated August 29. the CA rendered its assailed Decision. 2003. (c) whether or not the NLRC had sufficient basis to overturn its own decision despite its overwhelming findings that respondents were illegally dismissed. (b) all of the respondents were certified to by petitioner Munro as workers and even commended for their satisfactory performance. and ORDERING the private respondents to pay damages in the amount of P50.47 P 175. the former failed to set. hired depending on the tourist season and when the need arose in maintaining petitioners' resort for the benefit of guests.685. 2000 [sic].32 6. it ordered payment of P10.453.058. The NLRC held that respondents were regular employees of petitioners since all the factors determinative of employer-employee relationship were present and the work done by respondents was clearly related to petitioners' resort business. that the repeated hiring of respondents established that the services rendered by them were necessary and desirable to petitioners' resort business. Attorney's fees (10%) Total Award P 108. holding that respondents were not regular employees but project employees. Ronald Q.16 The CA held respondents were regular employees.00 to each complainant as financial assistance. 2003.15 the dispositve portion of which reads: WHEREFORE. 2002. Visca 5. in view of the foregoing.53 P1. arguing that respondents were project employees. Respondents then filed a Petition for Certiorari14 with the CA raising three issues for resolution: (a) whether or not the respondents were project employees of petitioners. specific periods when the employment relationship would be terminated.058.196. . Visca P 211.000. not project workers. hired for a short period of time to do some repair jobs in petitioners' resort business. respondents were regular seasonal employees. since in the years that petitioners repeatedly hired respondents' services. 2000 [sic]. 12 On February 27.977.087.774.00 P 200. even once.859 Petitioners failed to convince the NLRC that respondent Visca was not an independent contractor and the other respondents were selected and hired by him.

2003 AND REINSTATING THE DECISION DATED AUGUST 29. arbitrary and whimsical exercise of power. since their jobs as carpenters. the very antithesis . For certiorari to lie. and it must be shown that the discretion was exercised arbitrarily or despotically.It is thus incumbent upon petitioner to satisfactorily establish that respondent Commission or executive labor arbiter acted capriciously and whimsically in total disregard of evidence material to or even decisive of the controversy. as distinguished from errors of jurisdiction. which is merely confined to issues of jurisdiction or grave abuse of discretion. since their termination was attended by bad faith. which is not proper in petitions for review under Rule 45 of the Rules of Court. since respondents failed to recite specifically how the NLRC abused its discretion. motor boats. which include the repairs of furniture. that the factual findings of the LA and the NLRC on the lack of employer-employee relationship between petitioners and respondents should be accorded not only respect but finality. the CA awarded respondents P50. Jr. v. 2004. By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. in order that the extraordinary writ of certiorari will lie. they argue that they have amply established that they are regular employees of petitioners. II THE HONORABLE COURT OF APPEALS ERRED IN REVERSING AND SETTING ASIDE THE RESOLUTION DATED FEBRUARY 27. Petitioners then filed the present petition19 on the following grounds: I THE HONORABLE COURT OF APPEALS ERRED IN GIVING DUE COURSE TO THE SPECIAL CIVIL ACTION UNDER RULE 65 NOTWITHSTANDING THE FACT THAT RESPONDENTS HAVE FAILED TO PROVE THE GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION THAT WOULD ALLOW THE NULLIFICATION OF THE ASSAILED RESOLUTION OF THE NATIONAL LABOR RELATIONS COMMISSION. petitioners filed a Motion for Reconsideration. there must be capricious. On August 18. in any case. Olegario. 17 but it was denied by the CA in a Resolution18 dated February 2.21 thus: The rule is settled that the original and exclusive jurisdiction of this Court to review a decision of respondent NLRC (or Executive Labor Arbiter as in this case) in a petition for certiorari under Rule 65 does not normally include an inquiry into the correctness of its evaluation of the evidence. are not within the province of a special civil action for certiorari. an allegation essentially required in a petition for certiorari under Rule 45 of the Rules of Court. the three issues raised by respondents in their petition before the CA required appreciation of the evidence presented below and are therefore errors of judgment. The petition is bereft of merit. as exercised previously by this Court and now by the CA. The extent of judicial review by certiorari of decisions or resolutions of the NLRC. 20 Petitioners argue that the CA erred in giving due course to respondents' petition. 2002 RENDERED BY THE NATIONAL LABOR RELATIONS COMMISSION. Errors of judgment. are not at all foreign to the business of maintaining a beach resort. not of jurisdiction.00 as damages. On the other hand. respondents contend that the issues raised by the petitioners call for reevaluation of the evidence presented by the parties.In addition to the amounts granted by the NLRC in its August 29. is described in Zarate. cottages and windbreakers. 2002 Decision. in that petitioners not only gave respondents the run-around but also blatantly hired others to take respondents' place despite their claim that the so-called temporary stoppage of work was due to budgetary constraints. 2005.000.

As a corollary. when the findings of the NLRC contradict those of the LA. because to do so would be to destroy its comprehensiveness and usefulness. if it finds that their consideration is necessary to arrive at a just decision of the case. Hence. respondents alleged in its petition with the CA that the NLRC’s conclusions had no basis in fact and in law. which is alleged to have been capriciously. the Court in the exercise of its equity jurisdiction may look into the records of the case and re-examine the questioned findings.22 (Emphasis supplied) The CA. thus: [I]n Ong v. pursuant to Garcia. In the exercise of our superintending control over inferior courts. such as the NLRC. we are to be guided by all the circumstances of each particular case "as the ends of justice may require. whimsically. we see no error on its part when it made anew a factual determination of the matters and on that basis reversed the ruling of the NLRC. when it is necessary to prevent a substantial wrong or to do substantial justice.24 the Court elucidated on when certiorari can be properly resorted to. however. the appellate court can grant a petition for certiorari when the factual findings complained of are not supported by the evidence on record. we ruled that certiorari can be properly resorted to where the factual findings complained of are not supported by the evidence on record. the Court refrains from reviewing factual assessments of lower courts and agencies exercising adjudicative functions. in that "it totally disregarded the evidence of the [respondents] and gave credence to the [petitioners'] asseverations which were in themselves insufficient to overturn duly established facts and conclusions.26 In the present case. since respondents drew attention to the absence of substantial evidence to support the NLRC's complete turnabout from its . resolution is confined only to issues of jurisdiction and grave abuse of discretion on the part of the labor tribunal. The appellate court needs to evaluate the materiality or significance of the evidence. Occasionally. or arbitrarily disregarding evidence which is material to or decisive of the controversy. in Gutib v. in its assailed decision or resolution.23 In Garcia v. committed grave abuse of discretion by capriciously. even if they are not assigned as errors in their appeal. The cases in which certiorari will issue cannot be defined. Earlier.of the judicial prerogative in accordance with centuries of both civil law and common law traditions. In this instance. So wide is the discretion of the court that authority is not wanting to show that certiorari is more discretionary than either prohibition or mandamus. And in another case of recent vintage.25 (Emphasis supplied) Thus. and when necessary to arrive at a just decision of the case. therefore. the Court is constrained to delve into factual matters where. we emphasized thus: [I]t has been said that a wide breadth of discretion is granted a court of justice in certiorariproceedings. we further held: In the review of an NLRC decision through a special civil action for certiorari. National Labor Relations Commission. in relation to all other evidence on record. whimsically. the CA was correct in giving due course to the Petition for Certiorari. as in the instant case." So it is that the writ will be granted where necessary to prevent a substantial wrong or to do substantial justice. the findings of the NLRC contradict those of the Labor Arbiter. People. can take cognizance of a petition for certiorari if it finds that the NLRC."27 Consequently. thus. this Court is clothed with ample authority to review matters. The same principles are now necessarily adhered to and are applied by the Court of Appeals in its expanded jurisdiction over labor cases elevated through a petition for certiorari. Court of Appeals. The CA cannot make this determination without looking into the evidence presented by the parties. or arbitrarily disregarded by the NLRC.

While they had designations as "foreman. To permit a party to change his theory on appeal will be unfair to the adverse party. motor boats. not project employees. Generally. thus.37 . There is likewise no evidence of the project employment contracts covering respondents' alleged periods of employment. since they worked continuously for petitioners from three to twelve years without any mention of a "project" to which they were specifically assigned. after a careful examination of the records. 2002 finding that respondents were regular employees. respondents cannot be classified as project employees. Department Order No. he will not be permitted to change his theory on appeal.36 This Court has held that an employment ceases to be coterminous with specific projects when the employee is continuously rehired due to the demands of employer’s business and re-engaged for many more projects without interruption. 33 At any rate. A project employee is one whose "employment has been fixed for a specific project or undertaking. cottages. a report must be made to the nearest employment office. petitioners classified respondent Visca as an independent contractor and the other respondents as his employees.32 It is a matter of law that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below. of the termination of the services of the workers every time completes a project. as well as the old Policy Instructions No. sang a different tune. the existence of an employer-employee relationship is a factual matter that will not be delved into by this Court. pursuant to Policy Instruction No. While initially advancing the absence of an employer-employee relationship. there is no evidence that petitioners reported the termination of respondents' supposed project employment to the DOLE as project employees. 20. while in their Motion for Reconsideration31 before the NLRC. They were tasked with the maintenance and repair of the furniture."34 Before an employee hired on a per-project basis can be dismissed. 2003. Further. 19. In their Position Paper30 filed before the LA. petitioners on appeal. 28 However. a party cannot subsequently take a position contrary to. The NLRC should not have considered the new theory offered by the petitioners in their Motion for Reconsideration. since only questions of law may be raised in petitions for review." "carpenter" and "mason. with his pleadings. the Court is constrained to resolve the issue of whether respondents are regular or permanent employees due to the conflicting findings of fact of the LA. 20. 35 In the present case. petitioners' position in their Motion for Reconsideration before the NLRC runs contrary to their earlier submission in their Position Paper before the LA. the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. Petitioners' failure to file termination reports is an indication that the respondents were not project employees but regular employees. necessitating a review of the evidence on record. so to speak. 2003 classifying respondents as project employees. so to speak.original Decision dated August 29. petitioners treated respondents as project employees. the Court finds that the CA did not err in finding that respondents were regular employees. More importantly. The resolution of this issue principally hinges on the determination of the question whether respondents are regular or project employees. requires employers to submit a report of an employee’s termination to the nearest public employment office every time his employment is terminated due to a completion of a project. essentially invoking the termination of the period of their employer-employee relationship." they performed work other than carpentry or masonry. As the object of the pleadings is to draw the lines of battle. between the litigants and to indicate fairly the nature of the claims or defenses of both parties. 29 The petitioners were ambivalent in categorizing respondents. or inconsistent. The case will be reviewed and decided on that theory and not approached and resolved from a different point of view. and windbreakers and other resort facilities. to its subsequent Resolution dated February 27. the NLRC and the CA. The next issue before the Court is whether the CA committed an error in reversing the NLRC Resolution dated February 27.

until petitioners implement the reinstatement aspect. 1999 to July 31. The assailed Decision dated July 30. WHEREFORE. 78620 are AFFIRMED withMODIFICATION that the award for backwages should be computed from the time compensation was withheld up to the time of actual reinstatement. then the employee must be deemed a regular employee.46 The computation of the award for backwages from the time compensation was withheld up to the time of actual reinstatement is a mere legal consequence of the finding that respondents were illegally dismissed by petitioners. a party who has not appealed is not entitled to affirmative relief other than the ones granted in the decision of the court below.38 In Maraguinot. this Court is imbued with sufficient authority and discretion to review matters. substantive rights like the award of backwages resulting from illegal dismissal must not be prejudiced by a rigid and technical application of the rules. Being regular employees. if not indispensability. 2002 decision of the NLRC or that respondents themselves did not appeal the CA Decision on this matter. pursuant to Article 280 of the Labor Code and jurisprudence. Article 27944 of the Labor Code. 2002 only. and their services may not be terminated except for causes provided by law. not otherwise assigned as errors on appeal. inclusive of allowances. continues to accumulate. as amended. Jr. its obligation to respondents. substantial evidence supported the CA finding that respondents were regular employees.The Court is not persuaded by petitioners' submission that respondents' services are not necessary or desirable to the usual trade or business of the resort. rehired by the same employer for the same tasks or nature of tasks. Thus. insofar as accrued backwages and other benefits are concerned.39 the Court ruled that "once a project or work pool employee has been: (1) continuously. does not bar this Court from ordering its modification. While as a general rule. 2005 of the Court of Appeals in CA-G. provides that an illegally dismissed employee shall be entitled to reinstatement.45 Besides. in its earlier Decision dated August 29. 2004 and Resolution dated February 2. as opposed to intermittently."40 That respondents were regular employees is further bolstered by the following evidence: (a) the SSS Quarterly Summary of Contribution Payments41 listing respondents as employees of petitioners. It is evident that respondents’ backwages should not be limited to said period. they were entitled to security of tenure. National Labor Relations Commission. SP No. v. Double costs against petitioners. The backwages due respondents must be computed from the time they were unjustly dismissed until actual reinstatement to their former positions. computed the award for backwages from May 8. The fact that the CA failed to consider this when it affirmed the August 29. full backwages.42 (c) petty cash vouchers43showing payment of respondents' salaries and holiday and overtime pays. 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. and (2) these tasks are vital.R. SO ORDERED. the petition is DENIED. necessary and indispensable to the usual business or trade of the employer. The Court notes that the NLRC. . if it finds that their consideration is necessary in arriving at a complete and just resolution of the case or to serve the interests of justice or to avoid dispensing piecemeal justice. (b) the Service Record Certificates stating that respondents were employees of petitioners for periods ranging from three to twelve years and all have given "very satisfactory performance". The repeated and continuing need for their services is sufficient evidence of the necessity. Thus. of their services to petitioners' resort business. 2002 which was affirmed by the CA.

R. Valmonte for petitioner. No. NATIONAL LABOR RELATIONS COMMISSION and ATLANTIC GULF and PACIFIC CO. 1993 ROGELIO CARAMOL. Inc. petitioner. INC. . 102973 August 24. OF MANILA. vs. Alafriz & Associates for respondent Atlantic Gulf & Pacific Company of Manila. Arturo A. Ricardo C.respondents.Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G..

particularly in actively manning the picket lines.94 as of 29 November 1989. (ATLANTIC GULF). . 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. of Manila. The article provides — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. a worker hired by respondent Atlantic Gulf and Pacific Co. Petitioner Rogelio Caramol. 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 service to be performed is seasonal in nature and the employment is for the duration of the season. on a "project-to-project" basis but whose employment was renewed forty-four (44) times by the latter. whether. On the other hand. 2 The factual findings of the Labor Arbiter show that petitioner was hired by respondent ATLANTIC GULF on 2 June 1983 for the position of rigger.826.BELLOSILLO. seeks the reversal of the decision of public respondent National Labor Relations Commission (NLRC) dated 31 October 1991 in NLRC NCR 00-01-04703-88 1 which reversed and set aside the decision of the Labor Arbiter. Petitioner claims that because of his involvement in unionism. That. In reversing the Labor Arbiter. respondent ATLANTIC GULF contends that petitioner was one of the several thousands of workers who were hired on a "project-to-project" basis and whose employment was covered by Project Employment Contract for a particular project and for a definite period of time. ordered it to cease and desist from further committing unfair labor practice against petitioner.. 280 of the Labor Code. based on the foregoing considerations. Until the occurence of the strike on 10 May 1986. public respondent NLRC declared in the dispositive portion of its questioned decision thus — WHEREFORE. On 15 May 1986 private respondent dispensed with the services of petitioner claiming as justification the completion of the Nauru project to which petitioner was assigned and the consequent expiration of the employment contract. as amended. the decision appealed from is hereby REVERSED and SET ASIDE.: The controversy as to whether petitioner is a regular or casual employee arises from the conflicting interpretations by the parties of Art. such service is continuous or broken. J. declared illegal the constructive dismissal of petitioner and directed respondent ATLANTIC GULF to immediately reinstate petitioner to his former position without loss of seniority rights and with full back wages in the amount of P68. he was among those who were not re-admitted after the strike. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. The Labor Arbiter had earlier declared respondent ATLANTIC GULF guilty of unfair labor practice. 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. and finding the claim of complainant to be without legal and factual basis. Inc. any employee who has rendered at least one year of service. his last assignment was at respondent ATLANTIC GULF's plant in Batangas.

. petitioner is a project employee falling under the exception of Art. .e. . as amended. 61594. the employee was assigned to perform tasks which are usually necessary or desirable in the usual business or trade of the employer. . be it specie. As correctly asserted by respondent-company. public order or public policy" (Brent School. there were no reports of termination submitted to the nearest public employment office every time employment was terminated due to the completion of the project. v. Zamora. Thus. Under the Labor Code as well as the Civil Code of the Philippines.According to public respondent NLRC. whatever its object. they should be struck down as contrary to public policy. such arrangement must be struck down as contrary to public policy. public policy and jurisprudence. The exception under Article 280 of the Labor Code is precisely designed to meet an exigency like in the case at bar. There is no question that stipulation on employment contract providing for a fixed period of employment such as "project-to-project" contract is valid provided the period was agreed upon knowingly and voluntarily the parties. said assignments did not end on a project to project basis. The records of the case established the fact that during the employment of complainant with the respondent company he was made to sign a project employment contract.R. without any force. they should be struck down as contrary tenurial security by the employee. although the contrary was made to appear through the signing of separate employment contracts. 5. NLRC 3where it was held that the "project" employee therein was deemed a regular employee considering the attendant circumstances. 280 of the Labor Code. morals. 1986 when the AG & P Workers and Employees Union staged a strike. duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent. . 48494. "the validity and propriety of contracts and obligation with a fixed or definite period are recognized. Sept. In the case before us. Mr. . After a careful perusal of the records. Contract workers are not considered regular. 28. Ople. explaining that — . No. except the general admonition against stipulations contrary to law. . since a contract is the law between the parties" (Pakistan International Airlines Corp. . morals. . and imposes no restraints on the freedom of the parties to fix the duration of a contract. G. 4 However. 1990). This Office is of the considered belief that the nomenclature by which he was addressed by the . we sustain the findings of the Labor Arbiter that — . . 1990). The principle of party autonomy must not be interfered with absent any showing of violation of law. This practice started from the time he was hired in 1973 up to May 10. it would be unjust to retain an employee in the payroll while waiting for another project. "A contract duly entered into should be respected. . food or services.R. good custom. v. Feb. We grant the petition. Petitioner now insists that public respondent NLRC gravely abused its discretion and committed serious errors of law and that its questioned decision is contrary to the jurisprudential doctrine enunciated in Magante v. good custom or public order. Their services depend upon availability of a project to be undertaken. Caramol's services have been fixed for a specific project shown in the contracts of employment. . where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee. Inc. .. . we find sufficiently established circumstances showing that the supposed fixed period of employment by way of a project-to-project contract has been imposed to preclude acquisition of tenurial security by the petitioner. No. Expressed differently this practice of the respondent insofar as the complainant is concerned has been going on continiously for thirteen (13) long years. Accordingly. or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. i. G.

. but only with respect to such activity and while such activity exists" (De Leon v. 280 of the Labor Code. August 21. . therefore. Also..respondent has already attained a regular status of employment. . However. . 70705. the law overrides such conditions which are prejudicial to the interest of the worker. NLRC 6 that — . . rigorously disapproves said contracts which demonstrate a clear attempt to exploit the employee and deprive him of the protection sanctioned by the Labor Code.e. and in some cases the length of time of its performance and its continued existence (See De Leon v. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. . as rigger throughout his period of employment. The Court. Owing to private respondent's length of service with the petitioner corporation. the employment contracts entered into by private respondent with the petitioner have the purpose of circumventing the employee's security of tenure. In this regard. . Hence the employment is also considered regular. . the "project-to-project" employment of petitioner was renewed several times. . . Admittedly. . with the successive contracts of employment where petitioner continued to perform the same kind of work. forty-four (44) project contracts 5 according to him. by this fact alone he is entitled by law to be considered a regular employee. . . NLRC. Private respondent points to this successive employment as evidence that petitioner is a project employee in its projects. It is of no moment that private respondent was told when he was hired that his employment would only be "on a day to day basis for a temporary period" and may be terminated at any time subject to the petitioner's discretion. . 176 SCRA 615. It is asserted that being in the construction industry. . . ibid). i. Precisely. No. Evidently. 1989. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. There can therefore be no escape from the conclusion that petitioner is a regular employee of private respondent ATLANTIC GULF. 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. National Labor Relations Commission. G. . Such repeated rehiring and the continuing need for his service are sufficient evidence of the necessity and indispensability of his service to the petitioner's business or trade. to which the desperate worker often accedes. even if the performance is not continuous or merely intermittent. the private respondent performed the said task which lasted for more than one year. by operation of law. 620-621) . . . it is not unusual for private respondent and other similar companies to hire employees or workers for a definite period only. . In addition to his length of service the documentary evidence on record established the fact that complainant's job is both necessary and desirable to the business engaged in by the respondent . It is noteworthy that what determines whether a certain employment is regular or casual is not the will and word of the employer. of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. he became a regular employee. The primary standard . or whose employment is co-terminus with the completion of a specific project as recognized by Art. we need only reiterate our ruling in Baguio Country Club Corporation v. It is the nature of the activities performed in relation to the particular business or trade considering all circumstances. it is clearly manifest that petitioner's tasks were usually necessary or desirable in the usual business or trade of private respondent. .R. one year after he was employed . . if the employee has been performing the job for at least one year.

by reversing the decision of the Labor Arbiter. WHEREFORE. Rule 65.R. there should have been filed as many reports of termination as there were construction projects actually finished if it were true that petitioner Telesforo Maganto was only a project worker. 1. The decision of the Labor Arbiter dated 29 November 1989 is AFFIRMED and REINSTATED. Throughout the duration of petitioner's employment. General Manager. On the contrary. On this point. as required by Policy Instruction No. . . Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. the pronouncement in Magante v. consequently. the petition is GRANTED. if petitioner were employed as a "project employee" private respondent should have submitted a report of termination to the nearest public employment office every time his employment is terminated due to completion of each construction project." This is not correct. We thus hold significant as to prejudice the cause of private respondent the absence of any such termination reports. the company is not required to obtain a clearance from the Secretary of Labor in connection with such termination. . particularly the Magante decision. and a period of three (3) months is considered reasonable. of the Rules of Court which may be done within a reasonable time from receipt of the subject decision. OSCAR BANZON. the instant position is filed pursuant to Sec. the same should be dismissed as having been filed out of time. alluding to the penultimate paragraph of Art. public respondent NLRC gravely abused its discretion. In ignoring or disregarding the existing jurisprudence on regular employment. What is required of the company is a report to the nearest Public Employment Office for Statistical purposes (Emphasis Supplied). He may even further pray for the issuance of a restraining order or a temporary injunction to prevent the immediate execution of the assailed decision. private respondent failed to present any report of termination. notwithstanding its claim that petitioner was successively employed. Moreover. 223 of the Labor Code which states that "[t]he decision of the Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties. vs.Moreover. NLRC 7 is of singular relevance to the instant case: Moreover. which provides: . Petitioners. 8 The fact that the assailed decision becomes final and executory after a ten day period does not preclude the adverse party from challenging it by way of an original action for certiorari under Rule 65 of the Rules of Court. No. SO ORDERED. 2006 ABESCO CONSTRUCTION AND DEVELOPMENT CORPORATION and MR. 20. the decision of respondent National Labor Relations Commission dated 31 October 1991 is hereby REVERSED and SET ASIDE. Respondent further claims that since the appeal was filed twenty-nine (29) days from receipt of the NLRC decision by petitioner. 141168 April 10.

: Petitioner company was engaged in a construction business where respondents were hired on different dates from 1976 to 1992 either as laborers.099. being project employees. road roller operators. Alberto Ramirez 2. The LA later on ordered the consolidation of the two complaints. Loyola 3. REYNALDO P.00 P 355.00 4.911. RESOLUTION CORONA. if reinstatement is no longer feasible. painters or drivers. respondents filed two separate complaints1 for illegal dismissal against the company and its General Manager.68 However.695. before the Labor Arbiter (LA).764. respondents' employment was coterminous with the project to which they were assigned. MANUEL LOYOLA. Oscar Banzon. Alexander Bautista 6. a one-month salary shall be awarded as a form of separation pay.2 Petitioners denied liability to respondents and countered that respondents were "project employees" since their services were necessary only when the company had projects to be completed.695. 1998. EDGAR TAJONERA and GARY DISON. J. ALEXANDER BAUTISTA.* Respondents. hence. and moral and exemplary damages. he stated: WHEREFORE. The complaints also included claims for non-payment of the 13th month pay. He likewise found that their employment was terminated without just cause.764. In a decision dated January 7.22 5. Respondents are likewise ordered to pay complainants the following: .00 53. Edgar Tajonera 7. They were not regular employees who enjoyed security of tenure and entitlement to separation pay upon termination from work. Manuel B.ALBERTO RAMIREZ. Reynaldo Acodesin 46. Gary Dison TOTAL 45. After trial.985. ACODESIN. In 1997. Petitioners argued that. the LA declared respondents as regular employees because they belonged to a "work pool" from which the company drew workers for assignment to different projects.24 62. He ruled that respondents were hired and re-hired over a period of 18 years. five days' service incentive leave pay. Petitioners allegedly dismissed them without a valid reason and without due process of law.285. judgment is hereby rendered declaring respondents guilty of illegal dismissal and ordering the latter to reinstate complainants to their former positions with backwages and other benefits from the time their compensation was withheld from them up to the time their actual reinstatement which as of the date of this decision amounted to: NAME 1. BERNARDO DIWA. Hernando Diwa P49. they were deemed to be regular employees. in addition to the aforementioned award. at its discretion.00 46. premium pay for holidays and rest days.22 49.

088. On the first issue.00 P345. 5 Petitioners filed a motion for reconsideration but it was dismissed by the CA.Alberto Ramirez 4.6 In this petition for review under Rule 45 of the Rules of Court.00 11.00 P23.020. we take exception to 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.646. we rule that respondents were regular employees.00 29. the petition for certiorari is hereby dismissed.00 45.00 41. P76.005.00 SALARY DIFFERENTIAL 13th MONTH PAY P1.141.00 11.005.000.020. xxx xxx xxx WHEREFORE.00 2.00 74.net Subsequently.141.00 20.00 2.088.750. Loyola 5.141.00 19.5 DAYS SERVICE UNPAID SALARY P765. However.00 P23. their defense was that the [respondents] were project employees who were not entitled to security of tenure.00 NAME 1.00 P13.00 INCENTIVE LEAVE SEPARATION PAY P4.Manuel B.Alexander Bautista 3.00 11. the latter had no more right to further benefits. for the first time.617.479.Reynaldo Acodesin 6. for lack of merit.820.Gary Dison .735.00 130.00 11.170.00 2. The petitioners are barred from raising a new defense at this stage of the case.00 P2.029. petitioners raise the following issues for resolution: (1) whether respondents were project employees or regular employees and (2) whether respondents were illegally dismissed.141.00 11. The CA was not convinced and dismissed petitioners' appeal.3 Petitioners appealed to the National Labor Relations Commission (NLRC) which affirmed the LA's decision. petitioners filed a petition for review in the Court of Appeals (CA) arguing that they were not liable for illegal dismissal since respondents' services were merely put on hold until the resumption of their business operations. Previous to this.00 xxx All other claims are hereby dismissed for lack of merit.4 1avvphil.274.00 3.Hernando Diwa 2.00 2.500.020.Edgardo Tajonera 7.141. They also averred that they had paid respondents their full wages and benefits as provided by law. hence.00 P765.344. that the [respondents] were not dismissed but their employment was merely suspended. It held: We note that the petitioners are taking a new tack in arguing.147.

we are constrained to declare them as regular employees. they can remain as project employees regardless of the number of years they work. is defined in an employment agreement and is made clear to the employees at the time of hiring. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. for failure of petitioners to substantiate their claim that respondents were project employees. The Court has enunciated in some cases 9 that members of a "work pool" can either be project employees or regular employees. WHEREFORE. petitioner..10 Such duration. Hence.8 Moreover. INC. the duration and scope of which are specified at the time they are engaged for that project. On the issue of illegal dismissal. NATIONAL LABOR RELATIONS COMMISSION and ROLANDO LAYA. et al. However. Furthermore. 114290 September 9. Costs against petitioners. petitioners staunchly postured that respondents were only "project employees" whose employment tenure was coterminous with the projects they were assigned to. petitioners cannot belatedly argue that respondents continue to be their employees (so as to escape liability for illegal dismissal). they took a different stance by insisting that respondents continued to be their employees. . Petitioners' inconsistent and conflicting positions on their true relation with respondents make it all the more evident that the latter were indeed their regular employees. petitioners did not have that kind of agreement with respondents.7 Length of service is not a controlling factor in determining the nature of one's employment. 1996 RAYCOR AIRCONTROL SYSTEMS. we hold that petitioners failed to adhere to the "two-notice rule" which requires that workers to be dismissed must be furnished with: (1) a notice informing them of the particular acts for which they are being dismissed and (2) a notice advising them of the decision to terminate the employment.Contrary to the disquisitions of the LA. vs. 11 In this case. the petition is hereby DENIED. Before the LA. employees (like respondents) who work under different project employment contracts for several years do not automatically become regular employees. Neither did they inform respondents of the nature of the latter's work at the time of hiring.. employees who are members of a "work pool" from which a company (like petitioner corporation) draws workers for deployment to its different projects do not become regular employees by reason of that fact alone. SO ORDERED. before the CA. as well as the particular work/service to be performed.R. 12Respondents were never given such notices. respondents. The principal test for determining whether employees are "project employees" or "regular employees" is whether they are assigned to carry out a specific project or undertaking. No.

employed by petitioner in its business of installing airconditioning systems in buildings. Wilfredo Brun. private respondents filed three cases of illegal dismissal against petitioner. docketed as NLRC-NCR 00-03-05930-92. which terminations were to be effective the day following the date of receipt of the notices. 20 (series of 1977) 5 of the Department of Labor and Employment. some allegedly exceeding ten years). As found by the labor arbiter.: Were private respondents. On January 22. Angelito Realingo. and "(o)f consequence. private respondent Laya and fourteen other employees of petitioner filed NLRC NCR Case No. Carlito de Guzman.PANGANIBAN. and neither is the employer required to secure a clearance from the Secretary of Labor in connection with such termination. and Gerardo de Guzman. who worked in various capacities as tinsmith. This case was dismissed on May 20. 2 which set aside and reversed the decision of the labor arbiter 3 dated 22 January 1993. Crisostomo Donompili. as well as the subsequent order of respondent Commission denying petitioner's motion for reconsideration. Florencio Espina. separation pay. Necessarily. Jorge Cipriano. The Facts Petitioner's sole line of business is installing airconditioning systems in the building of its clients. 1992 for want of cause of action. but petitioner maintains that they were project employees who were assigned to work on specific projects of petitioner. The parties were given opportunity to file their respective memoranda and other supplemental pleadings before the labor arbiter. 1993 by the National Labor Relations Commission. And as project employees. welder and painter. a fixed period of employment which "automatically terminates without necessity of further notice" or even earlier at petitioner's sole discretion. with some ranging from two six years (but private respondents claim much longer tenures. the Labor Arbiter issued his decision dismissing the complaints for lack of merit. Susano Atienza. Because of the termination. Rolando Laya. aircon mechanic. petitioner hired private respondents Roberto Fulgencio. the [petitioner] cannot hire workers in perpetuity. how should the case be decided? This Court answers the foregoing questions in resolving this petition for certiorari assailing the Decision 1promulgated November 29. installer. and NLRC NCR 00-07-03699-92. 00-0302080-92 for their "regularization". holiday premium pay. He reasoned that the evidence showed that the individual complainants (private respondents) were project employees within the meaning of Policy Instructions No.. they were served with uniformly-worded notices of "Termination of Employment" by petitioner "due to our present business status". having been assigned to work on specific projects involving the installation of air-conditioning units as covered by contracts between their employer and the latter's clients. their average length of service with petitioner exceeded one year. and that the nature of petitioner's business — mere installation (not manufacturing) of aircon systems and equipment in buildings of its clients — prevented petitioner from hiring private respondents as regular employees. private respondent would not be entitled to termination pay. were subsequently consolidated. etc. J. leadman. among others. Jaime Calipayan. Hernan Delima. alleging that the reason given for the termination of their employment was not one of the valid grounds therefor under the Labor Code. Eduardo Reyes. . Private respondent felt they were given their walking papers after they refused to sign a "Contract Employment" providing for. the installation of airconditioning systems "must come to a halt as projects come and go". Private respondents insist that they had been regular employees all along. 1993. They also claimed that the termination was without benefit of due process. Romulo Magpili. Ramil Hernandez. NLRC NCR 00-05-02789-92. In 1991. project employees or regular employees? And were their dismissals "due to (petitioner's) present status" and effective the day following receipt of notice legal? Where both the petitioner and the respondents fail to present sufficient and convincing evidence to prove their respective claims. 4 On different dates in 1992. In connection with such installation work. The three separate cases filed by private respondents against petitioner.

Hence.Private respondents appealed to the respondent NLRC. No 20 and their publication of an advertisement for replacements for the same positions held by complainants (see p. 1993 Decision reversed the arbiter and found private respondent to have been regular employees illegally dismissed. it can easily be gleaned that complainants belong to a work pool from which the respondent company drew its manpower requirements. No. We doubt respondent's assertion that complainants were really assigned to different projects. The dispositive portion followed immediately and read: WHEREFORE.I. 20. Pay them full backwages from the time they were dismissed up to the time they are actually reinstated. Verily. no such name of project appears. the appealed Decision is hereby SET ASIDE and a new one entered ordering respondent to: 1. 65. this petition. The "Contract Employment" which it submitted (see pp. 1994 for lack of merit. petitioner reiterates the same points it raised before the tribunals below: that it is engaged solely in the business of installation of airconditioning units or systems in the building of its clients. It has no . and in ordering their reinstatement with full backwages. Even assuming that complainants were project employees. We are thus inclined to give credence to complainants' allegation that they were eased out of work for their refusal to sign the one-sided "Contract Employment". record). Anent the dismissal of complainants. record) as required under P. record) purporting to show particular projects are not reliable nay even appears to have been recently typewritten. and 2. 198. This is buttressed by the fact that many of the complainants have been employed for long periods of time already. For clarity's sake. Immediately reinstate complainants (private respondents) to their former positions without loss of seniority rights and privileges. which in its November 29. In the "Contract Employment" submitted by complainants (see p. 32-38. Petitioner's motion for reconsideration was denied by public respondent on February 23. The respondent Commission made the following four-paragraph disquisition: From the above rules. their unceremonious dismissal coupled with the attempt to replace them via the newspaper advertisement entitles them to reinstatement with backwages under P. Issues Petitioner charges public respondent NLRC with grave abuse of discretion in finding private respondent to have been non-project employees and illegally dismissed. 196 and 197. In support of its petition. complainants were non-project employees. let us re-state the pivotal question involved in the instant case as follows: whether private respondents were project employees or regular (non-project) employees. record). The fact that complainants were dismissed merely to spite them is made more manifest by respondent's failure to make a report of dismissal or secure a clearance from the Department of Labor (see pp. and whether or not they were legally dismissed.I. suffice it to state that the same was capricious and whimsical which as shown by the vague reason proffered by respondent for said dismissal which is "due to our present business state" (should read "status") is undoubtedly not one of the valid causes for termination of an employment.

this Court may choose to re-examine the same. if the workers in the work pool are free to leave anytime and offer their services to other employers then they era project employees employed by a construction company in a particular project or in a phase thereof. claiming that they had worked continuously for petitioner for several years. we combed the Decision in search of such basis. Members of a work pool from which a construction company draws its project employees.) Thus.permanent clients with continuous projects where its workers could be assigned. A careful reading of the aforequoted and preceding provisions establishes the fact that project employees may or may not be members of a work pool. it can easily be gleaned that complainants belong to a work pool from which the respondent company drew its manpower requirements. some of them as long as ten years. neither is it a manufacturing firm. these project employees were free to work elsewhere with other establishments." In other words. members of a work pool could be either project employees or regular employees. 20. for petitioner. And when between projects. as we hereby do in this case now." On the basis of the foregoing. except that when such findings are contrary to those of the labor arbiter. and in turn. In the instant case. If they are employed in a particular project. respondent NLRC did not indicate how private respondents came to be considered members of a work pool as distinguished from ordinary (non-work pool) employees. Private respondents controverted these assertions of petitioner. However. Petitioner also claim that the private respondents signed project contracts of employment indicating the names of the projects or buildings they were working on. However. (The foregoing matters were never controverted by private respondents. The First Issue: Project Employees or Regular Employees? An Unfounded Conclusion We scoured the assailed Decision for any trace of arbitrariness. The Court's Ruling Ordinarily. by operation of law had become regular employees. For our part. and noted that the respondent Commission first cited the facts of the case. then quoted part of the arbiter's disquisition along with relevant portions of Policy Instructions No. Most of its projects last from two to three months. " (emphasis supplied) By reason of such "finding". and was not continuous or uninterrupted as claimed by them. 20 pertaining to work pools merely raised further questions. but failed to indicate the basis for such finding and conclusion. if considered employees of the construction company while in the work pool are non-project employees or employees for an indefinite period. It further insists that "(a)t the incipience of hiring. their work ceases and that they have to wait for another installation projects (sic). after which it immediately leapt to the conclusion that "(F)rom the above rules. (that is the employer may or may not have formed a work pool at all). and thus. This is buttressed by the fact that many of the complainants have been employed for long periods of time already. repeated scrutiny of the provisions of Policy Instruction No. It did not establish that a work pool existed in the first place. work is "not done in perpetuity but necessarily comes to a halt when the installation of airconditioning units is completed. private respondents were appraised (sic) that their work consisted only in the installation of airconditioning units and that as soon as the installation is completed. capriciousness or grave abuse discretion. Neither did it make any finding as to whether the herein private respondents . the findings made by the NLRC are entitled to great respect and are even clothed with finality and deemed binding on this Court. petitioner asserts that it could not have hired private respondents as anything other than project employees. the completion of the project or of any phase thereof will not mean severance of employer-employee relationship. respondent NLRC concluded that private respondents were regular (not project) employees. their work was co-terminous with the duration of the project.

were indeed free to leave anytime and offer their services to other employers. Verily. the names of projects could have been filled in simply in order to make the contracts speak the truth more clearly or completely. The names of the projects clearly appears to have been contrived. as well as respondent Commission and the Solicitor General. in order to supply the data which ought to have been indicated in the originals at the time those were issued. then made an unwarranted assumption that bad faith and fraudulent intent attended the filling in of the project names in said Annexes. In the "Contract Employment" submitted by complainants (see p. no reason was advanced for not according the petitioner the presumption of good faith. let alone that a written contract should indicate the name of the project to which the employee concerned is being assigned. an employment shall be deemed to be regular where the employee . or had any intent to deceive or impose upon tribunals below. complainants were non-project employees. respondent Commission determined — without sufficient basis — that complainants were non-project employees. but which for some reason or other were omitted in short. Said Annexes were photocopies of photocopies of the original "Contract Employment's". But this alone did not automatically or necessarily mean that petitioner had committed any falsehood or fraud. The names of the projects clearly appear to have been recently typewritten. we note that there is no requirement in Policy Instructions No. despite the fact that such a determination would have been critical in defining the precise nature of private respondents' employment. record). 7 and the names of projects had been typed onto these photocopies. Clearly. because the names of the projects could have been typed/filed in good faith." (emphasis supplied) The basis for respondent NLRC's statement that the contracts were contrived was the fact that the names of projects clearly appeared to have been typed in only after the contracts had been prepared. However. As a matter of fact. Conclusion Based on Unwarranted Assumption of Bad Faith Immediately thereafter. 1992 filed with the labor arbiter)did not lead inexorably to the conclusion that these were "contrived". we should make mention here that what is or is not stated in a contract does not control nor change the juridical nature of an employment relationship since the same is determined and fixed by law. 8 which is highly instructional on this question: The law on the matter is Article 280 of the Labor Code which reads in full: Article 280. meaning that the originals of said contracts probably did not indicate the project names. should have re-read and carefully studied ALU-TUCP vs. as vigorously contended by petitioner. and therefore. "E" and "F" 6 to its Position Paper dated July 30. "B-1". Regular and Casual Employment — The provisions of the written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. National Labor Relations Commission. (Incidentally. Respondent NLRC. In any event. 32-38. our examination of the contracts (presented by petitioner as Annexes "A". "B". We quote: We doubt respondent's (petitioner's) assertion that complainants (private respondents) were really assigned to different projects. Notably.) Statutory Basis for Determining Nature of Employment The parties and their respective counsel. petitioner's failure to indicate in the originals of the contracts the name(s) of the project(s) to which private respondents were assigned does not necessarily mean that they could not have been project employees. the NLRC's conclusion of regular employment has no factual support and is thus unacceptable. "D". 65. 20 that project employees should be issued written contracts of employment. no such name of project appears. record) purporting to show particular projects are not reliable nay even appears to have been contrived. The "Contract Employment" which it submitted (see pp. nunc pro tunc. "C". it can be easily and clearly established with the use of the naked eye that the dates and durations of the projects and/or work assignments had been typed into the original contracts.

we should that both respondent Commission and the Solicitor General were in error in concluding based on private respondents' claimed length of employment (allegedly for over ten years) that they were regular employees. . .g. . . relates to casual employees. quoted earlier. The second paragraph of Article 280 of the Labor Code. from the other undertakings of the company. . a residential condominium building in Baguio City. a particular job or undertaking that is within the regular or usual business of the employer company. their status as project employees. project employees. . i. In the case of Mercado. the Solicitor General in his arguments tried to "force-fit" private respondents into the "regular employee" category and completedly disregarded the critical distinctions set forth in ALU-TUCP and earlier cases. . . Sr. The same decision goes on to say: 9 . That. xxx xxx xxx . and a domestic air terminal in ilolo City Employees who are hired for the carrying out of one of these separate projects. Incidentally. the principal test for determining whether particular employees are property characterized as "project employees" as distinguished from "regular employees. whether such service is continuous or broken." is whether or not the "project employees" were assigned to carry out a "specific project or undertaking. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. does not detract from." the duration (and scope) of which were specified at the time the employees were engaged for that project. quoted above. this Court ruled that the proviso in the second paragraph of Article 280 relates only to casual employees and is not applicable to those who fall within the definition of said Article's first paragraph. The simple fact that the employment of petitioners as project employees had gone beyond one (1) year. . Such job or undertaking begins and ends at determined or determinable times. any employee who has rendered at least one year of service. . or legally dissolve. 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. . a twenty-five story hotel in Makati.has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. providing that an employee who has served for at least one (1) year. not to project employees.. Sad to state. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. The typical example of this . (emphasis ours) In the realm of business and industry. type of project is a particular construction job or project of a construction company. . A construction company ordinarily carried out two or more discrete identifiable construction projects: e. .. shall be considered a regular employee. For.e. vs. ." and their services may be lawfully terminated at completion of the project. National Labor Relations Commission (201 SCRA 332 [1991]). but which is distinct and separate and identifiable as such. we note that "project" could refer to . are properly treated as "project employees. Inconclusive Evidence . the scope and duration of which has been determined and made known to the employees at the time of employment. as is evident from the provisions of Article 280 of the Labor Code.

and since such a line of business would obviously be highly (if not wholly) dependent on the availability of buildings or projects requiring such installation services. Besides. The said contracts therefore could in no wise be deemed conclusive evidence. petitioner in the case undoubtedly could have presented additional evidence to buttress its claim. pertaining to seven individual employees. After all. the past three years or so. Now. let us assume that private respondents (who were each making about P118. It is not so much that this Court cannot appreciate petitioner's contentions about the nature of its business and its inability to maintain a large workforce on its permanent payroll. in the instant case. knowing fully well that there would be periods (of uncertain duration) when no project can be had. they claimed. they would not constitute conclusive proof of petitioner's claim. while there are fifteen employees involved in the complaints. If the fifteen were. it can be easily surmised that petitioner. and citing the fact that the said contracts of employmentindicated the duration of the projects to which the private respondents had been assigned. it is patent that.50 per day in 1991) were paid only P100.000. The data from these contracts could then have been correlated to the data which could be found in petitioner's payroll records for. no matter how savvy. Ortega. say. can accurately forecast from year to year. who may be desperate for work and therefore in no position to bargain freely or negotiate terms to his liking.00 a year. or P540. Failure to Discharge Burden of Proof For that matter. For instance. contract terms are normally dictated by the employer and simply acceded to and accepted by the employee. these contracts." 11 and concluded that they were indeed project employees. would always try to keep its overhead costs to a minimum. To our mind. as they claimed.00 to P119. Private respondents have admitted that petitioner is engaged only in the installation (not manufacture) of aircon systems or units in buildings. only seven contracts in all were presented in evidence. still. there needs to be a finding as to whether or not the duration and scope of the projects were determined or specified and made known to herein private respondents at the time of their engagement. but not by the employees concerned. the overhead for their salaries alone — computed at P100. private respondents faulted the labor arbiter for giving credence and probative value to said contracts. duration and scope of past installation projects. which factor no businessman. and that their compensation had been computed on the basis of such work. except for one dated May 1992. aware that its revenues and income would be unpredictable. not counting 13th month pay. petitioner could have presented copies of its contracts with its clients. the longest being for about five months. even if the contracts presented by petitioner had been signed by the employees concerned. He then held that "(t)here is no denial that complainants were assigned to work in these projects.00 a month. Luis F. Moreover. . and would naturally want to engage workers on a per-project or per-building basis only. who had precisely refused to sign them.Based on the foregoing considerations. The labor arbiter tried to do this. let us say. in between projects. why didn't petitioner produce in evidence similar contracts for all the other years that private respondents had worked as project employees? To these points. were all one-shot contracts of short duration. it appears rather unlikely that petitioner would keep private respondent — all fifteen of them — continuously on its permanent payroll for. ten or twelve years. purportedly issued either in July or December of 1991. regular employees entitled to their wages regardless of whether or not they were assigned to work on any project. and we find it failed to discharge its burden of proof. inasmuch as petitioner had not denied nor rebutted private respondent' allegations that they had each worked several years for the petitioner.000. In any event. in the usual scheme of things. to show the time.00/day for 30 days in a month — would come to no less than P45. petitioner offered no explanation whatsoever. But petitioner did not produce such additional evidence. relying heavily on the "Contract(s) Employment" presented in petitioner's Annexes as well as on private respondents' own Annex "A" 10 attached to their Position Paper. 12 to show that private respondents had been working intermittently as and when they were assigned to said projects. Christmas bonus.00 per day. Thus. To illustrate. retaining very few employees (if any) on its permanent payroll. But the arbiter completed ignored the fact that all the "Contract(s) Employment" presented in evidence by both petitioner and private respondents had been signed only by petitioner's president and general manager. It would also have been more than glad if its employees found other employment elsewhere. it seems self-evident to this Court that. the obvious question is.

the certifications. Mr. and unarguably is not one of the valid or just causes provided by law for termination of an employment. 1985. 2. and 3." 14 Nonetheless. Fulgencio (one of the private respondents) has been connected with the undersigned corporation (Raycor) from August 22. at the very least. 1991 and September 01. said certifications refer only to three out of the fifteen private respondent. signed by one Flora P. Ortega. issued by petitioner itself. it certainly does not make business sense for it or anyone else to do so. and is in every sense contrary to human nature. . Atienza (still another of the private respondents) has been connected with the undersigned corporation from October 10. . Mr. Mr. Understandably. certifying that " . tend to put its claims in serious doubt. ". sick leaves and service incentive leaves. i. . not to mention common business practice. or. they do not necessarily overturn petitioner's contention that private respondents were project employees. Ortega. As Annex "D" thereof. Jaime Calipayan (another one of the private respondents) has been connected with the undersigned corporation from June 18. This is especially so since the said certifications were prepared by non-lawyers who in all likelihood were not aware of the potential legal implications and ramifications of what were ostensibly innocuous certifications. signed by Luis F. As found by respondent Commission. 1986 to May 18. certifying that ". it is however not difficult to understand that ordinary business activities are performed in the normal course without anticipation nor foreknowledge of litigation. we are not prepared to conclude on the basis of these certifications alone that private respondents were indeed regular employees. Thus. a Certification dated January 28.SSS/Medicare premium payments. 1992 as Aircon Installer". if petitioner resorted to such dismissals. a Certification dated June 06. President and General Manger of herein petitioner corporation. we noted that in their Memorandum of Appeal dated February 17. there is the unavoidable inference that petitioner regarded the private respondents as regular employees after all. 1992. Administrative/Accountant of Raycor. In other words. This situation was still further aggravated by the manner in which petitioner dismissed private respondents." is vague. the employer always has the burden of proof. For instance. the reason given for the dismissals. 1993 filed with the respondent Commission. since the notices of termination were signed. As held in one recent case. since it is still possible to read the documents as saying that the named employees were working as project employees during the period therein specified. probablysans any legal advice or awareness of the implications of such a move. On this score alone. there would have been no need to terminate them by sending them notices of termination. . 1990 to January 25. often with dispatch and usually with a minimum of documentation. it being doctrinal that in illegal dismissal cases. 1982 up to present as a Mechanical Installer. .. 1991. But more significantly — if indeed private respondents were project employees. 1983 up to present as Aircon Mechanical/Technician". to the effect that ". president and general manager of Raycor. Roberto B. But again. and in all likelihood prepared. the certifications do not categorically state that the three employees had been permanent employees of Raycor. while petitioner failed utterly to offer rebutting evidence. 20 itself. likewise signed by Luis G. "due to our present business status. to say the least. Susano A. 13 Petitioner's problem of weak evidence was further compounded by certain documentary evidence in the records below which controverted petitioner's position. Moreover. . whatever its classification. Perez.e. As Annex "C" thereof. Which is why we have difficulty understanding its failure to present clear and convincing evidence on this point. First of all. As Annex "B" thereof. so what could be true of them any not necessarily apply with respect to the other twelve." per Policy Instruction No. herein private respondents had attached as annexes thereto the following documents: 1. all things considered. and so forth. inasmuch as their employment ceases "as result of the completion of the project or any phase thereof in which they are employed. private respondents made big capital out of these certifications. still and all. Even if petitioner may have been able to afford such overhead costs. tended to confuse rather than clarify matters. . . this is inconclusive. we believe that petitioner could have made out a strong case. by the president and general manager of petitioner. But. . a Certification dated May 7.

did this Court waste its time and effort in re-examining the instant case? The answer is in the negative. which treats of retrenchments and closures due to business losses. 632 SHAW BLVD. for neither the Labor Code nor Policy Instructions No. 283 of the Labor Code as amended.All the aforesaid conflicting data have the net effect of casting doubt upon and clouding the real nature of the private respondents' employment status. maybe more..I." True indeed. not even due to petitioner's alleged "present business status". This point is best illustrated by considering the last ratiocination utilized by public respondent: "Even assuming that complainants were project employees. and in certain cases. petitioner did not afford them due process thru the twin requirements of notice and hearing. Second Issue: Terminations Illegal On the second issue of alleged illegality of the subject dismissals. petitioner. For which reason. that "the same was capricious and whimsical as shown by the vague reason proffered by respondent for said dismissal which is 'due to our present state' (should read 'status') is undoubtedly not one of the valid causes for termination of an employment. This Court cannot affirm a decision or judgment based on erroneous findings and conclusions. . 15 as the terminations took effect the day following receipt of the notices of termination. as mentioned above. Petitioner placed an ad 16 in the classified ads section of the People's Journal. On top of that. must have had at least one project. for justice can never be adequately dispensed to all parties if a judgment is not grounded on the truth. separation pay must be paid. 20. and was clearly in need of replacements for private respondents whom it had just fired. No. the dismissals could hardly have been due to a valid cause. the said terminations are not in accordance with law and therefore illegal. we should mention that an order for reinstatement with payment of backwages must be based on the correct premises." There is a world of difference between reinstatement as project employees and reinstatement as regular employees. And it cannot be denied that in the instant case. Even Art. On this court as well. INC. Having arrived at basically the same results as respondent NLRC with respect to private respondents' employment status. 17which read: WANTED IMMEDIATELY MECHANICAL INSTALLERS TINSMITHS WELDERS/PIPEFITTERS APPLY IN PERSON: RAYCOR AIR CONTROL SYSTEMS. we agree with respondent Commission when it held. Thus. but the difference was obviously lost on the respondent NLRC. 20 allows termination on such ground. we hereby hold that private respondents were regular employees of the petitioner. their unceremonious dismissal coupled with the attempt to replace them via the newspaper advertisement entitles them to reinstatement with backwages under P. And lastly. And we are mandated by law to resolve all doubts in favor of labor. MAND. the dismissals were illegal. Ineluctably. RM 306 20TH CENTURY BLDG. sometime in June 1992. in placing the ad. "in the pipeline" at that time. METRO MANILA Unmistakably. there is evidence of the bad faith of petitioner in terminating the private respondents. requires that the employer first serve written notice on the workers and the Department of Labor at least one month before the intended date thereof.

WHEREFORE. the assailed Decision is hereby SET ASIDE and a new one rendered holding that petitioner has failed to discharge its burden of proof in the instant case and therefore ORDERING the reinstatement of private respondents as regular employees of petitioner. without loss of seniority rights and privileges and with payment of backwages from the day they were dismissed up to the time are actually reinstated. No casts. the foregoing considered. Therefore. ambiguities and insufficiencies be resolved in favor of labor. neither party managed to make out a clear case. we perforce rule against petitioner and in favor of private respondents. uncertainties. .Conclusion We reiterate that this Court waded through the records of this case searching for solid evidence upon which to decide the case either way. the employer always has the burden of proof. and considering further that the law mandates that all doubts. But all told. considering that in illegal dismissal cases. .