engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the

SECOND DIVISION duration of the season." 12 Quite to the contrary, the private respondent’s work, that of "typist-clerk" is far from being "specific" or
"seasonal", but rather, one, according to the Code, "where the employee has been engaged to perform activities which are usually
[G.R. No. 86408. February 15, 1990.] necessary or desirable in the usual business." 13 And under the Code, where one performs such activities, he is a regular employee,"
[t]he provisions of written agreement to the contrary notwithstanding . . . 14
BETA ELECTRIC CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER
CRESENCIO INIEGO, BETA ELECTRIC EMPLOYEES ASSOCIATION, and LUZVIMINDA PETILLA, Respondents. It is true that in Biboso v. Victorias Milling Company, Inc., 15 we recognized the validity of contractual stipulations as to the duration
of employment, we can not apply it here because clearly, the contract-to-contract arrangement given to the private respondent was but
Ermitaño, Asuncion, Manzano & Associates for Petitioner. an artifice to prevent her from acquiring security of tenure and to frustrate constitutional decrees.

Leonardo C. Fernandez for Private Respondents. The petitioner can not insist that the private respondent had been hired "for a specific undertaking i.e. to handle the backlogs brought
about by the seasonal increase in the volume of her work." 16 The fact that she had been employed purportedly for the simple purpose
of unclogging the petitioner’s files does not make such an undertaking "specific" from the standpoint of law because in the first place,
DECISION it is "usually necessary or desirable in the usual business or trade of the employer," 17 a development which disqualifies it outrightly
as a "specific undertaking", and in the second place, because a "specific undertaking" is meant, in its ordinary acceptation, a special
type of venture or project whose duration is coterminous with the completion of the project, 18 e.g., project work. It is not the case in
SARMIENTO, J.: the proceeding at bar.

WHEREFORE, the petition is DISMISSED. The private respondent is ordered REINSTATED with backwages equivalent to three
The petitioner questions the decision of the National Labor Relations Commission affirming the judgment of the labor arbiter years with no qualification or deductions.
reinstating the private respondent with backwages.
SO ORDERED.
The petitioner hired the private respondent as clerk typist III 1 effective December 15, 1986 until January 16, 1987. 2
SECOND DIVISION
On January 16, 1987, the petitioner gave her an extension up to February 15, 1987. 3

On February 15, 1987, it gave her another extension up to March 15, 1987. 4
UNIVERSAL ROBINA G.R. No. 164736
On March 15, 1987, it gave her a further extension until April 30, 1987. 5 CORPORATION and/or
RANDY GREGORIO,
On May 1, 1987, she was given until May 31, 1987. 6 Petitioners,

On June 1, 1987, she was given up to June 30, 1987. 7 - versus -

BENITO CATAPANG, CARLOS
Her appointments were covered by corresponding written contracts. 8 ARARAO, ALVIN ALCANTARA, Present:
RESTY ALCORAN, REYNALDO
On June 22, 1987, her services were terminated without notice or investigation. On the same day, she went to the labor arbiter on a ARARAO, JUAN ARISTADO, PUNO, J., Chairman,
complaint for illegal dismissal. As the court has indicated, both the labor arbiter and the respondent National Labor Relations LITO CABRERA, ONOFRE AUSTRIA-MARTINEZ,
Commission ruled for her. CASANO, BEN CERVAS, CALLEJO, SR.,
JOSEPH CHUIDIAN, IRENEO TINGA, and
The Court likewise rules in her favor. COMENDADOR, ANGELITO CHICO-NAZARIO, JJ.
CONCHADA, RICHARD
The petitioner argues mainly that the private respondent’s appointment was temporary and hence she may be terminated at CORONADO, ELMER HILING,
will.chanroblesvirtualawlibrary RAMON JOYOSA, JOSE
LORIA, JR., VICTORIANO
That she had been hired merely on a "temporary basis" "for purposes of meeting the seasonal or peak demands of the business," 9 and LORIA, RUEL MARIKIT,
as such, her services may lawfully be terminated "after the accomplishment of [her] task" 10 is untenable. The private respondent was RODERICK PANG-AO, QUIRINO
to all intents and purposes, and at the very least, a probationary employee, who became regular upon the expiration of six months. PLATERO, PABLITO REDONDO,
Under Article 281 of the Labor Code, a probationary employee is "considered a regular employee" if he has been "allowed to work RAMIL ROXAS, RESTY SALAZAR,
after [the] probationary period." 11 The fact that her employment has been a contract-to-contract basis can not alter the character of NOEL TRINIDAD, FELICISIMO
employment, because contracts can not override the mandate of law. Hence, by operation of law, she has become a regular employee. VARELA, BALTAZAR
VILLANUEVA, ELPIDIO Promulgated:
In the case at bar, the private employee was employed from December 15, 1986 until June 22, 1987 when she was ordered laid-off. VILLANUEVA, JOEL
Her tenure having exceeded six months, she attained regular employment.chanrobles.com.ph : virtual law library VILLANUEVA, JONATHAN October 14, 2005
VILLANUEVA, and JAIME
The petitioner can not rightfully say that since the private respondent’s employment hinged from contract to contract, it was ergo, VILLEGAS,
"temporary", depending on the term of each agreement. Under the Labor Code, an employment may only be said to be "temporary" Respondents.
"where [it] has been fixed for a specific undertaking the completion of or termination of which has been determined at the time of the x-----------------------------------------------------------------------------------------x

1
 DECISION
Finding the Motion for Enforcement of Reinstatement Order dated 18 May 1999, filed by the
complainants to be in order, respondents are hereby directed to immediately comply in good faith to the
CALLEJO, SR., J.: reinstatement aspect of the Decision of this Office dated 30 March 1999.

Furthermore, it appearing from the records that several individuals in this case were inadvertently omitted as
Petitioner Universal Robina Corporation is a corporation duly organized and existing under the Philippine laws, while party-complainants in the aforesaid Decision, clarification is hereby made that the complainants hereinbelow set
petitioner Randy Gregorio is the manager of the petitioner companys duck farm in Calauan, Laguna. [1] forth are to be deemed included in the coverage of the said decision with the corresponding right(s) to their
The individual respondents were hired by the petitioner company on various dates from 1991 to 1993 to work at its duck backwages, to wit:
farm in Barangay Sto. Tomas, Calauan, Laguna. The respondents were hired under an employment contract which provided for a five-
month period. After the expiration of the said employment contracts, the petitioner company would renew them and re-employ the 1. Alvin Alcantara - P129,126.40
respondents. This practice continued until sometime in 1996, when the petitioners informed the respondents that they were no longer 2. Onofre Casano - P106,917.20
renewing their employment contracts.[2] 3. Joseph Chuidian - P104,165.10
In October 1996, the respondents filed separate complaints for illegal dismissal, reinstatement, backwages, damages and 4. Ramon Joyosa - P128,029.20
attorneys fees against the petitioners. The complaints were later consolidated. 5. Pablito Redondo - P105,409.20
On March 30, 1999, after due proceedings, the Labor Arbiter rendered a decision in favor of the respondents: 6. Ramil Roxas - P109,330.00
7. Resty Salazar - P105,296.10
WHEREFORE, premises considered, judgment is hereby rendered declaring that complainants have 8. Noel Trinidad - P108,312.10
indeed been illegally dismissed from their employment. 9. Felicisimo Varela - P119,358.20
Accordingly, respondents are hereby ordered to reinstate individual complainants to their former TOTAL - P1,015,943.50
positions without loss of seniority rights and to pay them their backwages as follows:
SO ORDERED.[4]
Complainants Amount
1. Reynaldo Ararao P113,703.20 On June 21, 1999, the Labor Arbiter issued a Writ of Execution enforcing the immediate reinstatement of the respondents as
2. Carlos Ararao P100,372.48 mandated in the March 30, 1999 Decision.
3. Resty Alcoran P100,372.48 On July 13, 1999, the petitioners manifested to the Labor Arbiter that they can reinstate only 17 of the 30 employees in view
4. Richard Coronado P113,703.20 of the phase out of the petitioner companys Agricultural Section as early as 1996. They averred that there were no other available
5. Quirino Platero P113,703.20 positions substantially similar to the positions previously occupied by the other 13 respondents, but that 10 of them could be
6. Benito Catapang P113,703.20 accommodated at the farms Duck Dressing Section which operates at an average of three days a week only. [5]
7. Jose Loria, Jr. P100,372.48
8. Elpidio Villanueva P113,703.20
9. Jonathan Villanueva P113,703.20
10. Baltazar Villanueva P113,703.20 On August 2, 1999, the Sheriff filed a Report stating that the petitioners had not yet reinstated the respondents. [6] The
11. Victoriano Loria P144,881.10 respondents then urged the Labor Arbiter to order their physical or payroll reinstatement and to cite the petitioners in contempt. On
12. Roderick Pangao P100,372.48 November 26, 1999, the Labor Arbiter issued an Order[7] directing the petitioners, under pain of contempt, to comply with the March 30,
13. Lito Cabrera P113,703.20 1999 Decision.
14. Elmer Hiling P113,703.20 On December 16, 1999, 17 employees were reinstated to their former positions. Thereafter, the respondents moved for the
15. Jaime Villegas P113,703.20 immediate reinstatement of the remaining 13 respondents. In the meantime, the petitioners manifested to the Labor Arbiter about the
16. Angelito Conchada P119,192.20 closure of the duck farm effective March 15, 2000.[8]
17. Juan Aristado P113,703.20
18. Joel Villanueva P113,703.20 On February 9, 2000, the Labor Arbiter issued an Order[9] directing the petitioners to immediately effect the actual or payroll
19. Ben Cervas P113,703.20 reinstatement of the remaining 13 respondents. In the said Order, the petitioners were likewise directed to settle whatever financial
20. Ruel Marikit P113,703.20 accountabilities they may have with the said respondents due to the delay in complying with the reinstatement aspect of the March 30,
21. Ireneo Comendador P113,703.20 1999 Decision.
Total ------------------------ P2,339,933.44
On February 16, 2000, the respondents manifested that the petitioners still failed and refused to comply with the February 9, 2000 Order.
Respondents are likewise ordered to pay fifteen percent (15%) of the total amount due, or P 350,990.01, That same day, the Labor Arbiter issued an Alias Writ of Execution commanding the Sheriff to cause the immediate reinstatement of
as and by way of attorneys fees. the 13 respondents and to collect their withheld salaries.[10]
On February 21, 2000, the respondents moved for the issuance of a notice of garnishment to collect the accumulated withheld
SO ORDERED.[3] wages of the 17 respondents who were reinstated on December 16, 1999 amounting to P649,400.00. The Labor Arbiter granted the
motion and issued a Second Alias Writ of Execution directing the Sheriff to proceed to collect the said amount plus execution fees.[11]

On May 17, 1999, the petitioners filed an Appeal Memorandum with the National Labor Relations Commission (NLRC) on the ground Thereafter, the petitioners filed an urgent motion to reconsider the February 9, 2000 Order and to quash the Alias Writ of
that the Labor Arbiter erred in ruling that the respondents are the petitioner companys regular employees. Execution. They reiterated their previous contention that they are unable to comply with the order either because the section to which
Meanwhile, on May 18, 1999, the respondents filed a Motion for Enforcement of Reinstatement Order with the Labor Arbiter. the 13 respondents were previously assigned had been phased out or the positions previously held by them have already been filled up. [12]
On June 3, 1999, the latter issued an Order, which reads in full:

2
 On March 1, 2000, the Labor Arbiter issued an Order[13] denying the petitioners motion to quash insofar as the reinstatement
aspect is concerned as well as the motion to reconsider and set aside the February 9, 2000 Order. In case of failure to comply with the
reinstatement of the 13 respondents, the Labor Arbiter directed the petitioner company to pay them separation pay instead. [14]
On March 13, 2000, the petitioners filed a Memorandum and Notice of Appeal with Prayer for the Issuance of a Temporary Restraining
Order[15] with the NLRC, assailing the February 9, 2000 and March 1, 2000 Orders and the two Alias Writs of Execution issued by the
Labor Arbiter.
On November 22, 2000, the NLRC affirmed the decision of the Labor Arbiter with the modification that the award of
attorneys fees was reduced to 10% of the total monetary award.[16]
Aggrieved, the petitioners filed a petition for certiorari with the Court of Appeals (CA). On August 21, 2003, the CA denied
the petition for lack of merit.[17] The CA held that after rendering more than one year of continuous service, the respondents became
regular employees of the petitioners by operation of law. Moreover, the petitioners used the five-month contract of employment as a
convenient subterfuge to prevent the respondents from becoming regular employees and such contractual arrangement should be struck
down or disregarded as contrary to public policy or morals. The petitioners act of repeatedly and continuously hiring the respondents in
a span of three to five years to do the same kind of work negates their assertion that the respondents were hired for a specific project or
undertaking only. As to the issue of the failure to reinstate the 13 respondents pending appeal, the CA opined that the petitioners should
have at least reinstated them in the payroll if there were indeed no longer any available positions for which they could be
accommodated.[18] Finally, the CA did not believe that the petitioners counsel was not furnished with copies of the assailed orders and
the alias writs of execution considering that, after the issuance of the said orders, the petitioners were able to file several pleadings
questioning the same.[19]
On September 23, 2003, the petitioners filed a Manifestation and Motion for Additional Time to File a Motion for
Reconsideration of the CA Decision.[20] They alleged therein that they received a copy of the decision on September 8, 2003 and had
until September 23, 2003 to file a motion for reconsideration. They then prayed for an extension of 10 days, or until October 3, 2003, to
submit a motion for reconsideration.
Realizing their error, the petitioners filed their Motion for Reconsideration two days later. In a Resolution [21] dated September
30, 2003, the CA denied the petitioners earlier motion for extension of time for being a prohibited pleading. Subsequently, the petitioners
filed their Urgent Motion to Admit Petitioners Motion for Reconsideration, but the CA merely noted the petitioners motion for
reconsideration in its April 15, 2004 Resolution. This prompted the petitioners to file a Motion to Resolve Petitioners Motion for
Reconsideration.[22] Finding no cogent reason to depart from its previous resolution denying the motion for extension of time to file a
motion for reconsideration, the CA denied the said motion for lack of merit on July 19, 2004. [23]
Hence, this petition for review wherein the petitioners raise the following grounds:
I.
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED THAT THE RESPONDENTS
ATTAINED THE STATUS OF REGULAR EMPLOYMENT AFTER THE LAPSE OF ONE YEAR FROM
THE DATE OF THEIR EMPLOYMENT.
II.
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED THAT DESPITE THE
UNAVAILABILITY OF POSITIONS WHERE THE THIRTEEN (13) RESPONDENTS ARE TO BE
REINSTATED THEY SHOULD STILL BE REINSTATED THROUGH PAYROLL.
III.
THE COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO RESOLVE THE ISSUE OF WHETHER
OR NOT THE PETITIONERS SHOULD BE HELD LIABLE FOR THE PAYMENT OF THE ALLEGED
WITHHELD SALARIES OF THE RESPONDENTS FROM THE DATE OF ISSUANCE OF THE WRIT
DESPITE THAT RESPONDENTS BELATED OR NON-REINSTATEMENT CANNOT BE ATTRIBUTED
TO THE PETITIONERS.
IV.
THE COURT OF APPEALS SHOULD HAVE RESOLVED PETITIONERS MOTION FOR
RECONSIDERATION CONSIDERING THAT THE DELAY WAS ONLY FOR TWO (2) DAYS AND WAS
THE RESULT OF AN HONEST MISTAKE.[24]
The petitioners submit that the respondents are not regular employees. They aver that it is of no moment that the respondents have
rendered service for more than a year since they were covered by the five-month individual contracts to which they duly acquiesced.
The petitioners contend that they were free to terminate the services of the respondents at the expiration of
their individual contracts. The petitioners maintain that, in doing so, they merely implemented the terms of the contracts. [25]
The petitioners assert that the respondents contracts of employment were not intended to circumvent security of tenure. They
point out that the respondents knowingly and voluntarily agreed to sign the contracts without the petitioners having exercised any undue
advantage over them. Moreover, there is no evidence showing that the petitioners exerted moral dominance on the respondents.[26]
The petitioners further assert that they cannot be compelled to actually reinstate, or merely reinstate in the payroll the 13
respondents considering there are no longer any available positions in the company. They submit that reinstatement presupposes that the
previous positions from which the respondents had been removed still exist or that there are unfilled positions, more or less, of similar
nature as the ones previously occupied by the said employees. Consequently, they cannot be made to pay the salaries of these employees
from the time the writ of execution was issued.[27]
Finally, the petitioners aver that their motion for reconsideration of the CA Decision should have been admitted by the CA considering
that the delay was only for two days and such delay was due to an honest mistake. They maintain that the ends of substantial justice
would have been better served if the motion for reconsideration was resolved since it raised critical issues previously raised in the petition
but not resolved by the CA.[28]
For their part, the respondents aver that the instant petition should be dismissed outright because the CA Decision has already become
final since the petitioners filed their motion for reconsideration beyond the reglementary 15-day period. They also aver that the motion
for extension of time to file a motion for reconsideration, a prohibited pleading, did not suspend the running of the period to file a motion
for reconsideration, which is also the period for filing an appeal with this Court. Hence, at the time the present petition was filed with
this Court, the period for filing the appeal had already lapsed. [29]The respondents further aver that the petition should likewise be
dismissed for lack of a verified statement of material dates. They assert that the Rules of Court requires a separate verified statement of
material dates and its incorporation in the body of the petition is not substantial compliance of such requirement. [30]
The respondents aver that they acquired the status as regular employees after rendering one year of service to the petitioner
company. They contend that the contracts providing for a fixed period of employment should be struck down as contrary to public policy,
morals, good customs or public order as it was designed to preclude the acquisition of tenurial security. [31]
The respondents contend that the order directing their payroll reinstatement was proper considering that the petitioners have
failed to actually reinstate them.[32] They assert that the delay in the reinstatement of the 13 respondents could only be attributed to the
petitioners; hence, they are liable for withheld salaries to these employees. [33]
It appears that the present petition has, indeed, been filed beyond the reglementary period for filing a petition for review
under Rule 45 of the Rules of Court. This period is set forth in Section 2, Rule 45, which provides as follows:
SEC. 2. Time for filing; extension. The petition shall be filed within fifteen (15) days from notice of the judgment
or final order or resolution appealed from, or of the denial of the petitioners motion for new trial or
reconsideration filed in due time after notice of judgment. (Emphasis supplied.)
In conjunction with the said provision, Section 1, Rule 52 of the same Rules provides:
SEC. 1. Period for filing. A party may file a motion for reconsideration of a judgment or final
resolution within fifteen (15) days from notice threof, with proof of service on the adverse party.
Clearly, the period for filing a motion for reconsideration and a petition for review with this Court are the same, that is, 15
days from notice of the judgment. When an aggrieved party files a motion for reconsideration within the said period, the period for filing
an appeal is suspended. If the motion is denied, the aggrieved party is given another 15-day period from notice of such denial within
which to file a petition for review under Rule 45. It must be stressed that the aggrieved party will be given a fresh 15-day period only
when he has filed his motion for reconsideration in due time on or before the expiration of the original 15-day period. Otherwise, if the
3
motion for reconsideration is filed out of time and no appeal has been filed, the subject decision becomes final and executory. [34] As such,
it becomes immutable and can no longer be attacked by any of the parties or be modified, directly or indirectly, even by the highest court Further, factual findings of labor officials who are deemed to have acquired expertise in matters within their respective
of the land.[35] jurisdiction are generally accorded not only respect but even finality, and bind us when supported by substantial evidence. [43]

The petitioners received the CA Decision on September 8, 2003; hence, they had until September 23, 2003 within which to WHEREFORE, premises considered, the petition is DENIED DUE COURSE. The Decision of the Court of Appeals
file a motion for reconsideration, or an appeal, through a petition for review, with this Court. Instead, the petitioners filed a motion for is AFFIRMED.
extension of time to file a motion for reconsideration on September 23, 2003, which is a prohibited pleading.[36]Thus, it did not suspend
the running of the period for filing an appeal. Consequently, the period to file a petition for review with this Court also expired on SO ORDERED.
September 23, 2003. Instead of going straight to this Court to attempt to file a petition for review (which had already expired), the SECOND DIVISION
petitioners pursued recourse in the CA by filing their motion for reconsideration two days later, or on September 25, 2003. The CA
merely noted the same. Dissatisfied, the petitioners subsequently filed a motion to resolve their motion for reconsideration. The CA ABESCO CONSTRUCTION AND G.R. No. 141168
acted on this motion only on July 19, 2004 and denied the same for lack of merit. DEVELOPMENT CORPORATION
and MR. OSCAR BANZON,
General Manager,
In filing their petition for review with this Court, the petitioners counted the 15-day period from their receipt of the July 19, Petitioners, Present:
2004 CA Resolution on August 4, 2004. Hence, according to their Motion for Extension of Time to File Petition for Review which they
filed on August 19, 2004, they had until that day within which to file a petition for review. They then asked the Court that they be granted PUNO, J., Chairperson,
an extension of 30 days, or until September 21, 2004 within which to file their petition. The Court granted the motion on the belief that SANDOVAL-GUTIERREZ,
the petitioners motion for reconsideration before the CA was duly filed and that the assailed July 19, 2004 CA Resolution had denied - v e r s u s - CORONA,
the said motion. Thereafter, the petitioners filed their petition for review on September 20, 2004. AZCUNA and
GARCIA, JJ.
It is, therefore, evident from the foregoing that the present petition was filed way beyond the reglementary period. Hence, its
outright dismissal would be proper. The perfection of an appeal in the manner and within the period prescribed by law is not only ALBERTO RAMIREZ, BERNARDO
mandatory but jurisdictional, and failure to perfect an appeal has the effect of rendering the judgment final and executory. [37] Just as a DIWA, MANUEL LOYOLA,
losing party has the privilege to file an appeal within the prescribed period, so does the winner also have the correlative right to enjoy REYNALDO P. ACODESIN,
the finality of the decision.[38] ALEXANDER BAUTISTA,
EDGAR TAJONERA and
Anyone seeking exemption from the application of the reglementary period for filing an appeal has the burden of proving the GARY DISON,*
existence of exceptionally meritorious instances warranting such deviation.[39] In this case, the petitioners failed to prove the existence Respondents. Present:
of any fact which would warrant the relaxation of the rules. In fact, they have not even acknowledged that their petition was filed beyond
the reglementary period. April 10, 2006
In any case, we find that the CA, the NLRC and the Labor Arbiter correctly categorized the respondents as regular employees
of the petitioner company. In Abasolo v. National Labor Relations Commission,[40] the Court reiterated the test in determining whether x------------------------------------------x
one is a regular employee:
RESOLUTION
The primary standard, therefore, of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or business of the employer.
The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The CORONA, J.:
connection can be determined by considering the nature of work performed and its relation to the scheme of the
particular business or trade in its entirety. Also, if the employee has been performing the job for at least a year, Petitioner company was engaged in a construction business where respondents were hired on different dates from 1976 to
even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need 1992 either as laborers, road roller operators, painters or drivers.
for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business.
Hence, the employment is considered regular, but only with respect to such activity and while such activity In 1997, respondents filed two separate complaints[1] for illegal dismissal against the company and its General Manager,
exists.[41] Oscar Banzon, before the Labor Arbiter (LA). Petitioners allegedly dismissed them without a valid reason and without due process of
law. The complaints also included claims for non-payment of the 13th month pay, five days service incentive leave pay, premium pay
for holidays and rest days, and moral and exemplary damages. The LA later on ordered the consolidation of the two complaints. [2]
Thus, we quote with approval the following excerpt from the decision of the CA:
Petitioners denied liability to respondents and countered that respondents were project employees since their services were necessary
It is obvious that the said five-month contract of employment was used by petitioners as a convenient only when the company had projects to be completed. Petitioners argued that, being project employees, respondents employment was
subterfuge to prevent private respondents from becoming regular employees. Such contractual arrangement coterminous with the project to which they were assigned. They were not regular employees who enjoyed security of tenure and
should be struck down or disregarded as contrary to public policy or morals. To uphold the same would, in effect, entitlement to separation pay upon termination from work.
permit petitioners to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual
basis, thereby violating the employees security of tenure in their jobs. After trial, 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, at its discretion. He ruled that respondents were hired and re-hired over a period of
Petitioners act of repeatedly and continuously hiring private respondents in a span of 3 to 5 years to 18 years, hence, they were deemed to be regular employees. He likewise found that their employment was terminated without just cause.
do the same kind of work negates their contention that private respondents were hired for a specific project or In a decision dated January 7, 1998, he stated:
undertaking only.[42]

4
 WHEREFORE, judgment is hereby rendered declaring respondents guilty of illegal dismissal and WHEREFORE, the petition for certiorari is hereby DISMISSED,for lack of merit.[5]
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: Petitioners filed a motion for reconsideration but it was dismissed by the CA. [6]
In this petition for review under Rule 45 of the Rules of Court, petitioners raise the following issues for resolution: (1) whether
NAME respondents were project employees or regular employees and (2) whether respondents were illegally dismissed.
1. Alberto Ramirez P49,764.00
2. Manuel B. Loyola 46,695.22 On the first issue, we rule that respondents were regular employees. However, we take exception to the reasons cited by the
3. Hernando Diwa 49,764.00 LA (which both the NLRC and the CA affirmed) in considering respondents as regular employees and not as project employees.
4. Reynaldo Acodesin 46,695.22
5. Alexander Bautista 45,285.24 Contrary to the disquisitions of the LA, employees (like respondents) who work under different project employment contracts
6. Edgar Tajonera 62,985.00 for several years do not automatically become regular employees; they can remain as project employees regardless of the number of
7. Gary Dison 53,911.00 years they work.[7] Length of service is not a controlling factor in determining the nature of ones employment.[8]
TOTAL P 355,099.68
Moreover, employees who are members of a work pool from which a company (like petitioner corporation) draws workers
However, if reinstatement is no longer feasible, a one-month salary shall be awarded as a form of separation pay, for deployment to its different projects do not become regular employees by reason of that fact alone. The Court has enunciated in some
in addition to the aforementioned award. cases [9] that members of a work pool can either be project employees or regular employees.

Respondents are likewise ordered to pay complainants the following: 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 duration and scope of which are specified at the time they are engaged for
NAME UNPAID SALARY 13THMONTH 5 DAYS SEPARATION that project.[10] Such duration, as well as the particular work/service to be performed, is defined in an employment agreement and is
SALARY DIFFERENTIAL PAY SERVICE PAY made clear to the employees at the time of hiring.[11]
INCENTIVE
LEAVE In this case, petitioners did not have that kind of agreement with respondents. Neither did they inform respondents of the
1.Hernando Diwa P765.00 P1,274.00 P4,147.00 nature of the latterswork at the time of hiring. Hence, for failure of petitioners to substantiate their claim that respondents were project
employees, we are constrained to declare them as regular employees.
2.Alexander Bautista P23,088.00 11,141.00 P2,005.00 45,617.00
3.Alberto Ramirez 11,141.00 2,005.00 74,646.00 Furthermore, petitioners cannot belatedly argue that respondents continue to be their employees (so as to escape liability for
illegal dismissal). Before the LA, petitioners staunchly postured that respondents were only project employees whose employment tenure
4.Manuel B. Loyola 11,141.00 2,020.00 41,170.00 was coterminous with the projects they were assigned to. However, before the CA, 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
5.Reynaldo Acodesin 11,141.00 2,020.00 20,735.00 make it all the more evident that the latter were indeed their regular employees.
6.Edgardo Tajonera 19,500.00 3,750.00 130,000.00
On the issue of illegal dismissal, we hold that petitioners failed to adhere to the two-notice rule which requires that workers
7.Gary Dison 11,141.00 2,020.00 29,029.00 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.[12] Respondents were never given such notices.
P765.00 P23,088.00 P76,479.00 P13,820.00 P345,344.00
WHEREFORE, the petition is hereby DENIED.
xxx

All other claims are hereby dismissed for lack of merit.[3] Costs against petitioners.

SO ORDERED.
Petitioners appealed to the National Labor Relations Commission (NLRC) which affirmed the LAs decision.[4]
FIRST DIVISION
Subsequently, 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. They also averred that they had
paid respondents their full wages and benefits as provided by law, hence, the latter had no more right to further benefits.
[G.R. No. 120969. January 22, 1998]
The CA was not convinced and dismissed petitioners appeal. It held:

We note that the petitioners are taking a new tack in arguing, for the first time, that the [respondents]
were not dismissed but their employment was merely suspended. Previous to this, their defense was that the
[respondents] were project employees who were not entitled to security of tenure. The petitioners are barred from
raising a new defense at this stage of the case.
xxx xxx xxx
ALEJANDRO MARAGUINOT, JR. and PAULINO ENERO, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION (SECOND DIVISION) composed of Presiding Commissioner RAUL T. AQUINO, Commissioner
ROGELIO I. RAYALA and Commissioner VICTORIANO R. CALAYCAY (Ponente), VIC DEL ROSARIO and
VIVA FILMS, respondents.

5
 DECISION
DAVIDE, JR., J.:
By way of this special civil action for certiorari under Rule 65 of the Rules of Court, petitioners seek to annul the 10 February
1995 Decision[1] of the National Labor Relations Commission (hereafter NLRC), and its 6 April 1995 Resolution [2]denying the motion
to reconsider the former in NLRC-NCR-CA No. 006195-94. The decision reversed that of the Labor Arbiter in NLRC-NCR-Case No.
00-07-03994-92.
The parties present conflicting sets of facts.
Petitioner Alejandro Maraguinot, Jr. maintains that he was employed by private respondents on 18 July 1989 as part of the filming
crew with a salary of P375.00 per week. About four months later, he was designated Assistant Electrician with a weekly salary
of P400.00, which was increased to P450.00 in May 1990. In June 1991, he was promoted to the rank of Electrician with a weekly salary
of P475.00, which was increased to P593.00 in September 1991.
Petitioner Paulino Enero, on his part, claims that private respondents employed him in June 1990 as a member of the shooting
crew with a weekly salary of P375.00, which was increased to P425.00 in May 1991, then to P475.00 on 21 December 1991.[3]
Petitioners tasks consisted of loading, unloading and arranging movie equipment in the shooting area as instructed by the
cameraman, returning the equipment to Viva Films warehouse, assisting in the fixing of the lighting system, and performing other tasks
that the cameraman and/or director may assign.[4]
Sometime in May 1992, petitioners sought the assistance of their supervisor, Mrs. Alejandria Cesario, to facilitate their request
that private respondents adjust their salary in accordance with the minimum wage law. In June 1992, Mrs. Cesario informed petitioners
that Mr. Vic del Rosario would agree to increase their salary only if they signed a blank employment contract. As petitioners refused to
sign, private respondents forced Enero to go on leave in June 1992, then refused to take him back when he reported for work on 20 July
1992. Meanwhile, Maraguinot was dropped from the company payroll from 8 to 21 June 1992, but was returned on 22 June 1992. He
was again asked to sign a blank employment contract, and when he still refused, private respondents terminated his services on 20 July
1992.[5]Petitioners thus sued for illegal dismissal[6] before the Labor Arbiter.
On the other hand, private respondents claim that Viva Films (hereafter VIVA) is the trade name of Viva Productions, Inc., and
that it is primarily engaged in the distribution and exhibition of movies -- but not in the business of making movies; in the same vein,
private respondent Vic del Rosario is merely an executive producer, i.e., the financier who invests a certain sum of money for the
production of movies distributed and exhibited by VIVA.[7]
Private respondents assert that they contract persons called producers -- also referred to as associate producers[8] -- to produce or
make movies for private respondents; and contend that petitioners are project employees of the associate producers who, in turn, act as
independent contractors. As such, there is no employer-employee relationship between petitioners and private respondents.
Private respondents further contend that it was the associate producer of the film Mahirap Maging Pogi, who hired petitioner
Maraguinot. The movie shot from 2 July up to 22 July 1992, and it was only then that Maraguinot was released upon payment of his last
salary, as his services were no longer needed. Anent petitioner Enero, he was hired for the movie entitled Sigaw ng Puso, later re-
titled Narito ang Puso. He went on vacation on 8 June 1992, and by the time he reported for work on 20 July 1992, shooting for the
movie had already been completed.[9]
After considering both versions of the facts, the Labor Arbiter found as follows:
On the first issue, this Office rules that complainants are the employees of the respondents. The producer cannot be considered as an
independent contractor but should be considered only as a labor-only contractor and as such, acts as a mere agent of the real employer,
the herein respondents. Respondents even failed to name and specify who are the producers. Also, it is an admitted fact that the
complainants received their salaries from the respondents. The case cited by the respondents, Rosario Brothers, Inc. vs. Ople, 131
SCRA 72 does not apply in this case.
It is very clear also that complainants are doing activities which are necessary and essential to the business of the respondents, that of
movie-making. Complainant Maraguinot worked as an electrician while complainant Enero worked as a crew [member].[10]
Hence, the Labor Arbiter, in his decision of 20 December 1993, decreed as follows:
WHEREFORE, judgment is hereby rendered declaring that complainants were illegally dismissed.
Respondents are hereby ordered to reinstate complainants to their former positions without loss [of] seniority rights and pay their
backwages starting July 21, 1992 to December 31, 1993 temporarily computed in the amount of P38,000.00 for complainant Paulino
Enero and P46,000.00 for complainant Alejandro Maraguinot, Jr. and thereafter until actually reinstated.
Respondents are ordered to pay also attorneys fees equivalent to ten (10%) and/or P8,400.00 on top of the award.[11]
Private respondents appealed to the NLRC (docketed as NLRC NCR-CA No. 006195-94). In its decision[12] of 10 February 1995,
the NLRC found the following circumstances of petitioners work clearly established:
1. Complainants [petitioners herein] were hired for specific movie projects and their employment was co-terminus with each movie
project the completion/termination of which are pre-determined, such fact being made known to complainants at the time of their
engagement.
xxx
2. Each shooting unit works on one movie project at a time. And the work of the shooting units, which work independently from each
other, are not continuous in nature but depends on the availability of movie projects.
3. As a consequence of the non-continuous work of the shooting units, the total working hours logged by complainants in a month
show extreme variations... For instance, complainant Maraguinot worked for only 1.45 hours in June 1991 but logged a total
of 183.25 hours in January 1992. Complainant Enero logged a total of only 31.57 hours in September 1991 but worked
for 183.35 hours the next month, October 1991.
4. Further shown by respondents is the irregular work schedule of complainants on a daily basis. Complainant Maraguinot was
supposed to report on 05 August 1991 but reported only on 30 August 1991, or a gap of 25 days. Complainant Enero worked on 10
September 1991 and his next scheduled working day was 28 September 1991, a gap of 18 days.
5. The extremely irregular working days and hours of complainants work explain the lump sum payment for complainants services for
each movie project. Hence, complainants were paid a standard weekly salary regardless of the number of working days and hours they
logged in. Otherwise, if the principle of no work no pay was strictly applied, complainants earnings for certain weeks would be very
negligible.
6. Respondents also alleged that complainants were not prohibited from working with such movie companies like Regal, Seiko and
FPJ Productions whenever they are not working for the independent movie producers engaged by respondents...This allegation was
never rebutted by complainants and should be deemed admitted.
The NLRC, in reversing the Labor Arbiter, then concluded that these circumstances, taken together, indicated that complainants
(herein petitioners) were project employees.
After their motion for reconsideration was denied by the NLRC in its Resolution [13] of 6 April 1995, petitioners filed the instant
petition, claiming that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in: (1) finding that
petitioners were project employees; (2) ruling that petitioners were not illegally dismissed; and (3) reversing the decision of the Labor
Arbiter.
To support their claim that they were regular (and not project) employees of private respondents, petitioners cited their
performance of activities that were necessary or desirable in the usual trade or business of private respondents and added that their work
was continuous, i.e., after one project was completed they were assigned to another project. Petitioners thus considered themselves part
of a work pool from which private respondents drew workers for assignment to different projects. Petitioners lamented that there was
no basis for the NLRCs conclusion that they were project employees, while the associate producers were independent contractors; and
thus reasoned that as regular employees, their dismissal was illegal since the same was premised on a false cause, namely, the completion
of a project, which was not among the causes for dismissal allowed by the Labor Code.
6
 Private respondents reiterate their version of the facts and stress that their evidence supports the view that petitioners are project
employees; point to petitioners irregular work load and work schedule; emphasize the NLRCs finding that petitioners never controverted
the allegation that they were not prohibited from working with other movie companies; and ask that the facts be viewed in the context
of the peculiar characteristics of the movie industry.
The Office of the Solicitor General (OSG) is convinced that this petition is improper since petitioners raise questions of fact,
particularly, the NLRCs finding that petitioners were project employees, a finding supported by substantial evidence; and submits that
petitioners reliance on Article 280 of the Labor Code to support their contention that they should be deemed regular employees is
misplaced, as said section merely distinguishes between two types of employees, i.e., regular employees and casual employees, for
purposes of determining the right of an employee to certain benefits.
The OSG likewise rejects petitioners contention that since they were hired not for one project, but for a series of projects, they
should be deemed regular employees. Citing Mamansag v. NLRC,[14] the OSG asserts that what matters is that there was a time-frame
for each movie project made known to petitioners at the time of their hiring. In closing, the OSG disagrees with petitioners claim that
the NLRCs classification of the movie producers as independent contractors had no basis in fact and in law, since, on the contrary, the
NLRC took pains in explaining its basis for its decision.
As regards the propriety of this action, which the Office of the Solicitor General takes issue with, we rule that a special civil action
for certiorari under Rule 65 of the Rules of Court is the proper remedy for one who complains that the NLRC acted in total disregard of
evidence material to or decisive of the controversy.[15] In the instant case, petitioners allege that the NLRCs conclusions have no basis
in fact and in law, hence the petition may not be dismissed on procedural or jurisdictional grounds.
The judicious resolution of this case hinges upon, first, the determination of whether an employer-employee relationship existed
between petitioners and private respondents or any one of private respondents. If there was none, then this petition has no merit;
conversely, if the relationship existed, then petitioners could have been unjustly dismissed.
A related question is whether private respondents are engaged in the business of making motion pictures. Del Rosario is
necessarily engaged in such business as he finances the production of movies. VIVA, on the other hand, alleges that it does not make
movies, but merely distributes and exhibits motion pictures. There being no further proof to this effect, we cannot rely on this self-
serving denial. At any rate, and as will be discussed below, private respondents evidence even supports the view that VIVA is engaged
in the business of making movies.
We now turn to the critical issues. Private respondents insist that petitioners are project employees of associate producers who, in
turn, act as independent contractors. It is settled that the contracting out of labor is allowed only in case of job contracting. Section 8,
Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code describes permissible job contracting in this wise:
Sec. 8. Job contracting. -- There is job contracting permissible under the Code if the following conditions are met:
(1) The contractor carries on an independent business and undertakes the contract work on his own account under his
own responsibility according to his own manner and method, free from the control and direction of his employer
or principal in all matters connected with the performance of the work except as to the results thereof; and
(2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and
other materials which are necessary in the conduct of his business.
Assuming that the associate producers are job contractors, they must then be engaged in the business of making motion
pictures. As such, and to be a job contractor under the preceding description, associate producers must have tools, equipment, machinery,
work premises, and other materials necessary to make motion pictures. However, the associate producers here have none of these.Private
respondents evidence reveals that the movie-making equipment are supplied to the producers and owned by VIVA. These include
generators,[16] cables and wooden platforms,[17] cameras and shooting equipment;[18] in fact, VIVA likewise owns the trucks used to
transport the equipment.[19] It is thus clear that the associate producer merely leases the equipment from VIVA. [20] Indeed, private
respondents Formal Offer of Documentary Evidence stated one of the purposes of Exhibit 148 as:
[21]
To prove further that the independent Producers rented Shooting Unit No. 2 from Viva to finish their films.
While the purpose of Exhibits 149, 149-A and 149-B was:
[T]o prove that the movies of Viva Films were contracted out to the different independent Producers who rented Shooting Unit No. 3
with a fixed budget and time-frame of at least 30 shooting days or 45 days whichever comes first.[22]
Private respondents further narrated that VIVAs generators broke down during petitioners last movie project, which forced the
associate producer concerned to rent generators, equipment and crew from another company. [23] This only shows that the associate
producer did not have substantial capital nor investment in the form of tools, equipment and other materials necessary for making a
movie. Private respondents in effect admit that their producers, especially petitioners last producer, are not engaged in permissible job
contracting.
If private respondents insist that their associate producers are labor contractors, then these producers can only be labor-only
contractors, defined by the Labor Code as follows:
Art. 106. Contractor or subcontractor.-- x x x
There is labor-only contracting where the person supplying workers to an employer does not have substantial capital or investment in
the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are
performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary
shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the
latter were directly employed by him.
A more detailed description is provided by Section 9, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code:
Sec. 9. Labor-only contracting. -- (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in
labor-only contracting where such person:
(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other
materials; and
(2) The workers recruited and placed by such person are performing activities which are directly related to the principal
business or operations of the employer in which workers are habitually employed.
(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered
merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner
and extent as if the latter were directly employed by him.
(c) For cases not falling under this Article, the Secretary of Labor shall determine through appropriate orders whether or
not the contracting out of labor is permissible in the light of the circumstances of each case and after considering
the operating needs of the employer and the rights of the workers involved. In such case, he may prescribe
conditions and restrictions to insure the protection and welfare of the workers.
As labor-only contracting is prohibited, the law considers the person or entity engaged in the same a mere agent or intermediary
of the direct employer. But even by the preceding standards, the associate producers of VIVA cannot be considered labor-only
contractors as they did not supply, recruit nor hire the workers. In the instant case, it was Juanita Cesario, Shooting Unit Supervisor and
an employee of VIVA, who recruited crew members from an available group of free-lance workers which includes the complainants
Maraguinot and Enero.[24] And in their Memorandum, private respondents declared that the associate producer hires the services of... 6)
camera crew which includes (a) cameraman; (b) the utility crew; (c) the technical staff; (d) generator man and electrician; (e) clapper;
etc....[25] This clearly showed that the associate producers did not supply the workers required by the movie project.
The relationship between VIVA and its producers or associate producers seems to be that of agency, [26] as the latter make movies
on behalf of VIVA, whose business is to make movies. As such, the employment relationship between petitioners and producers is
actually one between petitioners and VIVA, with the latter being the direct employer.
The employer-employee relationship between petitioners and VIVA can further be established by the control test. While four
elements are usually considered in determining the existence of an employment relationship, namely: (a) the selection and engagement
7
of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employees conduct, __________________
the most important element is the employers control of the employees conduct, not only as to the result of the work to be done but also
as to the means and methods to accomplish the same.[27] These four elements are present here. In their position paper submitted to the
APPOINTMENT SLIP
Labor Arbiter, private respondents narrated the following circumstances:

You are hereby appointed as SOUNDMAN for the film project entitled MANAMBIT.This appointment shall be effective upon the
[T]he PRODUCER has to work within the limits of the budget he is given by the company, for as long as the ultimate finish[ed]
commencement of the said project and shall continue to be effective until the completion of the same.
product is acceptable to the company...

For your services you shall receive the daily/weekly/monthly compensation of P812.50.
To ensure that quality films are produced by the PRODUCER who is an independent contractor, the company likewise employs a
Supervising PRODUCER, a Project accountant and a Shooting unit supervisor. The Companys Supervising PRODUCER is Mr. Eric
Cuatico, the Project accountant varies from time to time, and the Shooting Unit Supervisor is Ms. Alejandria Cesario. During the term of this appointment you shall comply with the duties and responsibilities of your position as well as observe the rules
and regulations promulgated by your superiors and by Top Management.
The Supervising PRODUCER acts as the eyes and ears of the company and of the Executive Producer to monitor the progress of the
PRODUCERs work accomplishment. He is there usually in the field doing the rounds of inspection to see if there is any problem that Very truly yours,
the PRODUCER is encountering and to assist in threshing out the same so that the film project will be finished on schedule. He
supervises about 3 to 7 movie projects simultaneously [at] any given time by coordinating with each film PRODUCER. The Project
(an illegible signature)
Accountant on the other hand assists the PRODUCER in monitoring the actual expenses incurred because the company wants to insure
that any additional budget requested by the PRODUCER is really justified and warranted especially when there is a change of original
plansto suit the tast[e] of the company on how a certain scene must be presented to make the film more interesting and more CONFORME:
commercially viable. (emphasis ours)
___________________
VIVAs control is evident in its mandate that the end result must be a quality film acceptable to the company. The means and
methods to accomplish the result are likewise controlled by VIVA, viz., the movie project must be finished within schedule without
exceeding the budget, and additional expenses must be justified; certain scenes are subject to change to suit the taste of the company; Name of appointee
and the Supervising Producer, the eyes and ears of VIVA and del Rosario, intervenes in the movie-making process by assisting the
associate producer in solving problems encountered in making the film. Signed in the presence of:
It may not be validly argued then that petitioners are actually subject to the movie directors control, and not VIVAs direction. The
director merely instructs petitioners on how to better comply with VIVAs requirements to ensure that a quality film is completed within _____________________
schedule and without exceeding the budget. At bottom, the director is akin to a supervisor who merely oversees the activities of rank-
and-file employees with control ultimately resting on the employer. Notably, nowhere in the appointment slip does it appear that it was the producer or associate producer who hired the crew members;
Moreover, appointment slips [28] issued to all crew members state: moreover, it is VIVAs corporate name which appears on the heading of the appointment slip. What likewise tells against VIVA is that
it paid petitioners salaries as evidenced by vouchers, containing VIVAs letterhead, for that purpose.[30]

During the term of this appointment you shall comply with the duties and responsibilities of your position as well as observe the rules All the circumstances indicate an employment relationship between petitioners and VIVA alone, thus the inevitable conclusion
and regulations promulgated by your superiors and by Top Management. is that petitioners are employees only of VIVA.

The next issue is whether petitioners were illegally dismissed. Private respondents contend that petitioners were project employees
The words superiors and Top Management can only refer to the superiors and Top Management of VIVA. By commanding crew whose employment was automatically terminated with the completion of their respective projects.Petitioners assert that they were regular
members to observe the rules and regulations promulgated by VIVA, the appointment slips only emphasize VIVAs control over employees who were illegally dismissed.
petitioners.
It may not be ignored, however, that private respondents expressly admitted that petitioners were part of a work pool; [31] and,
Aside from control, the element of selection and engagement is likewise present in the instant case and exercised by VIVA. A while petitioners were initially hired possibly as project employees, they had attained the status of regular employees in view of VIVAs
sample appointment slip offered by private respondents to prove that members of the shooting crew except the driver are project conduct.
employees of the Independent Producers[29] reads as follows:
A project employee or a member of a work pool may acquire the status of a regular employee when the following concur:
VIVA PRODUCTIONS, INC.
1) There is a continuous rehiring of project employees even after cessation of a project; [32] and
16 Sct. Albano St.
2) The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual business or trade of the
employer.[33]
Diliman, Quezon City

However, the length of time during which the employee was continuously re-hired is not controlling, but merely serves as a badge
PEDRO NICOLAS Date: June 15, 1992 of regular employment.[34]

8
 In the instant case, the evidence on record shows that petitioner Enero was employed for a total of two (2) years and engaged in
at least eighteen (18) projects, while petitioner Maraguinot was employed for some three (3) years and worked on at least twenty-three
(23) projects.[35] Moreover, as petitioners tasks involved, among other chores, the loading, unloading and arranging of movie equipment
in the shooting area as instructed by the cameramen, returning the equipment to the Viva Films warehouse, and assisting in the fixing of
the lighting system, it may not be gainsaid that these tasks were vital, necessary and indispensable to the usual business or trade of the
employer. As regards the underscored phrase, it has been held that this is ascertained by considering the nature of the work performed
and its relation to the scheme of the particular business or trade in its entirety. [36]
A recent pronouncement of this Court anent project or work pool employees who had attained the status of regular employees
proves most instructive:
The denial by petitioners of the existence of a work pool in the company because their projects were not continuous is amply belied by
petitioners themselves who admit that: xxx
A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during
temporary breaks in the business, provided that the worker shall be available when called to report for a project.Although primarily
applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary
cessation of work is concerned. This is beneficial to both the employer and employee for it prevents the unjust situation of coddling
labor at the expense of capital and at the same time enables the workers to attain the status of regular employees. Clearly, the
continuous rehiring of the same set of employees within the framework of the Lao Group of Companies is strongly indicative that
private respondents were an integral part of a work pool from which petitioners drew its workers for its various projects.
In a final attempt to convince the Court that private respondents were indeed project employees, petitioners point out that the workers
were not regularly maintained in the payroll and were free to offer their services to other companies when there were no on-going
projects. This argument however cannot defeat the workers status of regularity. We apply by analogy the case of Industrial-
Commercial-Agricultural Workers Organization v. CIR [16 SCRA 562, 567-68 (1966)] which deals with regular seasonal
employees. There we held: xxx
Truly, the cessation of construction activities at the end of every project is a foreseeable suspension of work. Of course, no
compensation can be demanded from the employer because the stoppage of operations at the end of a project and before the start of a
new one is regular and expected by both parties to the labor relations. Similar to the case of regular seasonal employees, the
employment relation is not severed by merely being suspended. [citing Manila Hotel Co. v. CIR, 9 SCRA 186 (1963)] The employees
are, strictly speaking, not separated from services but merely on leave of absence without pay until they are reemployed.Thus we
cannot affirm the argument that non-payment of salary or non-inclusion in the payroll and the opportunity to seek other employment
denote project employment.[37] (underscoring supplied)
While Lao admittedly involved the construction industry, to which Policy Instruction No. 20/Department Order No.
19[38] regarding work pools specifically applies, there seems to be no impediment to applying the underlying principles to industries
other than the construction industry.[39] Neither may it be argued that a substantial distinction exists between the projects undertaken in
the construction industry and the motion picture industry. On the contrary, the raison d' etre of both industries concern projects with a
foreseeable suspension of work.
At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a duty to re-hire a project
employee even after completion of the project for which he was hired. The import of this decision is not to impose a positive and
sweeping obligation upon the employer to re-hire project employees.What this decision merely accomplishes is a judicial recognition of
the employment status of a project or work pool employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the
employer of project or work pool employees who perform tasks necessary or desirable to the employers usual business or trade. Let it
not be said that this decision coddles labor, for as Lao has ruled, project or work pool employees who have gained the status of regular
employees are subject to the no work-no pay principle, to repeat:
A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during
temporary breaks in the business, provided that the worker shall be available when called to report for a project.Although primarily
applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary
cessation of work is concerned. This is beneficial to both the employer and employee for it prevents the unjust situation of coddling
labor at the expense of capital and at the same time enables the workers to attain the status of regular employees.
The Courts ruling here is meant precisely to give life to the constitutional policy of strengthening the labor sector,[40] but, we
stress, not at the expense of management. Lest it be misunderstood, this ruling does not mean that simply because an employee is a
project or work pool employee even outside the construction industry, he is deemed, ipso jure, a regular employee. All that we hold
today is that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same
employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade
of the employer, then the employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence. To
rule otherwise would allow circumvention of labor laws in industries not falling within the ambit of Policy Instruction No. 20/Department
Order No. 19, hence allowing the prevention of acquisition of tenurial security by project or work pool employees who have already
gained the status of regular employees by the employers conduct.
In closing then, as petitioners had already gained the status of regular employees, their dismissal was unwarranted, for the cause
invoked by private respondents for petitioners dismissal, viz., completion of project, was not, as to them, a valid cause for dismissal
under Article 282 of the Labor Code. As such, petitioners are now entitled to back wages and reinstatement, without loss of seniority
rights and other benefits that may have accrued.[41] Nevertheless, following the principles of suspension of work and no pay between the
end of one project and the start of a new one, in computing petitioners back wages, the amounts corresponding to what could have been
earned during the periods from the date petitioners were dismissed until their reinstatement when petitioners respective Shooting Units
were not undertaking any movie projects, should be deducted.
Petitioners were dismissed on 20 July 1992, at a time when Republic Act No. 6715 was already in effect. Pursuant to Section 34
thereof which amended Section 279 of the Labor Code of the Philippines and Bustamante v. NLRC,[42] petitioners are entitled to receive
full back wages from the date of their dismissal up to the time of their reinstatement, without deducting whatever earnings derived
elsewhere during the period of illegal dismissal, subject, however, to the above observations.
WHEREFORE, the instant petition is GRANTED. The assailed decision of the National Labor Relations Commission in NLRC
NCR CA No. 006195-94 dated 10 February 1995, as well as its Resolution dated 6 April 1995, are hereby ANNULLED and SET ASIDE
for having been rendered with grave abuse of discretion, and the decision of the Labor Arbiter in NLRC NCR Case No. 00-07-03994-
92 is REINSTATED, subject, however, to the modification above mentioned in the computation of back wages.
No pronouncement as to costs.
SO ORDERED.
SECOND DIVISION
[G.R. No. 129449. June 29, 1999]
CISELL A. KIAMCO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (4TH DIVISION), PHILIPPINE
NATIONAL OIL COMPANY (PNOC) and PNOC-ENERGY DEVELOPMENT CORPORATION (PNOC-
EDC), respondents.
DECISION
BELLOSILLO, J.:
On 1 July 1992 private respondent PHILIPPINE NATIONAL OIL COMPANY(PNOC) through its Energy Research and
Development Division, later incorporated as PNOC-ENERGY DEVELOPMENT CORPORATION (PNOC-EDC) (now its co-private
respondent herein), hired petitioner Cisell Kiamco as a project employee in its Geothermal Agro-Industrial Plant Project in Valencia,
Negros Oriental. The Contract of Employment[1]stipulated among others that Kiamco was being hired by the company as a technician
for a period of five (5) months from 1 July 1992 to 30 November 1992, or up to the completion of the project, whichever would come
first, at a monthly salary of P3,500.00.
9
 After the termination of the contract, a second one was entered into by the parties containing basically the same terms and
conditions except that the work-time was reduced to twenty-two (22) days per month instead of twenty-six (26) days as stipulated in the
first contract. The period of employment was from 1 December 1992 to 30 April 1993. [2]Thereafter Kiamco was again re-hired. This
time the contract was for six (6) months spanning 1 May 1993 to 30 November 1993 with an increased salary of P3,850.00 per month.[3]
However on 20 October 1993 Kiamco received a Memorandum[4] from the administration department demanding an explanation
from him on certain infractions he allegedly committed as follows:
1. Misconduct - for having replaced the stereo of a UNDP-ERDC vehicle without permission from the company;
2. Absence without official leave (AWOL) - for petitioners absence on 13 October 1993 and 15 October 1993;
3. Non-compliance of administrative reporting procedure on accidents - for having failed to submit the Police Accident Report and
other necessary requirements of a vehicular accident Kiamco was involved in;
4. Unauthorized use of company vehicles - for having used the UNDP-ERDC company vehicle without permission from his superiors.
In a letter dated 22 October 1993 Kiamco tried to explain his side[5] but private respondents found his explanation
unsatisfactory. On 28 October 1993 Kiamco received a Memorandum[6] placing him under preventive suspension from 1 November
1993 to 30 November 1993 pending further investigation. No investigation however was ever conducted. Private respondents contended
that an investigation was not necessary since Kiamco had ceased to be an employee ipso facto upon the expiration of his employment
contract on 30 November 1993.
On 1 December 1993 Kiamco reported back to work but was prevented by security guards from entering the company
premises. On 27 May 1994 private respondent PNOC-EDC reported to the Department of Labor and Employment that petitioner Kiamco
was terminated on 1 November 1993 due to the expiration of his employment contract and the abolition of his position. [7]
Thus on 25 April 1994 Kiamco filed before the NLRC Sub-Regional Arbitration Branch No. VII, Dumaguete City, a Complaint
for illegal suspension and dismissal against the PNOC.[8] He prayed that he be reinstated to his former position and paid back wages.On
30 June 1995 Labor Arbiter Geoffrey P. Villahermosa rendered a Decision dismissing the complaint for lack of merit. [9] According to
the Labor Arbiter, the three (3) employment contracts were freely and voluntarily signed by Kiamco and the PNOC representatives. The
contracts plainly stated that Kiamco was being hired for a specific project and for a fixed term. Therefore Kiamco could not question his
dismissal since it was in accordance with his employment contract.
Kiamco appealed the decision of the Labor Arbiter to public respondent National Labor Relations Commission (NLRC) which
on 27 September 1996 reversed the Labor Arbiter and ruled -
WHEREFORE x x x x the decision appealed from is REVERSED, VACATED and SET ASIDE and a new one entered declaring the
complainant as a regular employee of the respondents and to have been illegally dismissed by the latter. Ordering respondents to
REINSTATE the complainant to his former position without loss of seniority rights and privileges with back wages from the date of
his dismissal up to actual reinstatement less any income he may have earned during the pendency of the case. [10]
On 12 November 1996 private respondents filed a Motion for Reconsideration of the decision of the NLRC[11] contending that it
erred in holding that Kiamco was a regular employee and that the findings of the Labor Arbiter that Kiamco was a project employee
should be affirmed. On 23 January 1997 the NLRC issued a Resolution modifying its 27 September 1996 Decision in NLRC Case No.
V-0316-95 the dispositive portion of which reads -
WHEREFORE x x x x the decision in question is MODIFIED in accordance with Our above discussion. Accordingly, the
complainant-appellant is declared a project employee at respondents Geothermal Agro-Industrial Demonstration Plant and to continue
with said employment until the full completion of the project but in the absence of proof to that effect, complainant is hereby awarded
back wages for a period of six (6) months or in the amount of P23,100.00. The order declaring the complainant-appellant as a regular
employee of respondent Philippine National Oil Corporation [sic], and for said company to reinstate the complainant with full back
wages is hereby deleted.[12]
In his petition for certiorari Kiamco assails the 23 January 1997 Resolution of the NLRC. He charges the NLRC with grave abuse
of discretion amounting to lack or excess of jurisdiction in issuing the questioned Resolution and prays that it be nullified and he
reinstated to his former position. He also seeks payment of back wages, damages and attorneys fees. The petition also raises the following
issues: (a) whether the petition should be dismissed for failure of petitioner Kiamco to file a motion for reconsideration with the NLRC;
(b) whether petitioner is a regular employee or a project employee; (c) whether petitioner is entitled to reinstatement without loss of
seniority rights and privileges and to the payment of full back wages; and, (d) whether petitioner is entitled to moral and exemplary
damages.
Both the Solicitor General and private respondents insist that the petition should be dismissed because of petitioners failure to file
a motion for reconsideration with the NLRC, pleading that -
It is undisputed that petitioner failed to file a motion for reconsideration of the assailed Resolution before filing this petition. Such
being the case, the assailed Resolution became final and executory, petitioner can no longer question the correctness of the assailed
Resolution before this Honorable Court. As ruled in Palomado v. NLRC (257 SCRA 680, 687-699 [1996]): Additionally, the
allegations in the petition clearly show that petitioner failed to file a motion for reconsideration of the assailed Resolution before filing
the instant petition. x x x such failure constitutes a fatal infirmity even if the petition be treated as a special civil action
for certiorari. The unquestioned rule in this jurisdiction is that certiorariwill lie only if there is no appeal or any other plain, speedy
and adequate remedy expressly provided by law against the acts of public respondent. In the instant case, the plain and adequate
remedy expressly provided by law was a motion for reconsideration of the assailed decision x x x made under oath and filed within ten
(10) days from receipt of the questioned decision. And for failure to avail of the correct remedy expressly provided by law, petitioner
has permitted the subject Resolution to become final and executory after the lapse of the ten-day period x x x x[13]
But this is not a rigid rule. In Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals [14] we held -
Ordinarily, certiorari as a special civil action will not lie unless a motion for reconsideration is first filed before the respondent
tribunal, to allow it an opportunity to correct its assigned errors (citation omitted). This rule, however, is not without
exceptions. In Pajo v. Ago and Ortiz (108 Phil. 905) we held: Respondent contends that petitioners should have filed a motion for
reconsideration of the order in question, or asked for the dissolution of the preliminary injunction issued by the trial court, before
coming to us.
This is not always so. It is only when the questions are raised for the first time before this Court in a certiorari proceeding that the writ
shall not issue unless the lower court had first been given the opportunity to pass upon the same. In fine, when the questions raised
before this Court are the same as those which have been squarely raised in and passed upon by the court below, the filing of a motion
for reconsideration in said court before certiorari can be instituted in this Court is no longer prerequisite. In Locsin v. Climaco (26
SCRA 816) it was stated: When a definite question has been properly raised, argued and submitted to a lower court, and the latter has
decided the question, a motion for reconsideration is no longer necessary as a condition precedent to the filing of a petition
for certiorari in this Court.
The issues now raised by petitioner Kiamco were the very same issues submitted before the NLRC. And, as correctly pointed out
by Kiamco, the questioned resolution was in fact already the result of a motion for reconsideration filed by the original private
respondent.Thus, a motion for reconsideration filed before the NLRC would only be a rehash of the same arguments it previously
considered. We therefore hold that Kiamcos failure to file a motion for reconsideration is not fatal to his present petition.
The more important question to be resolved in this case is whether petitioner Kiamco is a regular employee or a project
employee. Article 280 of the Labor Code answers this query thus -
Art. 280. Regular and casual employment. - 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 or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.
An employee shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, that any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such activity exists.
10
 In Violeta v. NLRC[15] we held -
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, the duration
(and scope) of which were specified at the time the employees were engaged for that project. As defined, project employees are those
workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project or undertaking has been
determined at the time of engagement of the employee.
Under Policy Instruction No. 20 of the Secretary of Labor, project employees are those employed in connection with
a particular project. Non-project or regular employees are those employed without reference to any particular project.[16]
All the employment contracts which Kiamco signed stipulated that he was being employed by private respondents in their
Geothermal Agro-Industrial Demonstration Plant Project in Valencia, Negros Occidental. The contracts similarly provided -
WHEREAS, the COMPANY is undertaking projects related to applied research and development, technical consultancy, training,
information and planning services on energy and related technologies, that include the implementation and completion of (the)
Geothermal Agroindustrial Demonstration Plant Project with Project Code: 15-04309912-117 hereinafter referred to as the
PROJECT.[17]
Furthermore, not only was Kiamco assigned to a specific project, but the duration and completion of such project had also been
determined at the time of his employment. Thus -
NOW THEREFORE, for and in consideration of the foregoing, the COMPANY and the PROJECT EMPLOYEE hereby agree as
follows:
1. The COMPANY hires and engages the services of (the) PROJECT EMPLOYEE, and the latter has agreed to render and perform
services for the COMPANY, as Technician for a period commencing on 01 May 1993 to 31 October 1993 or up to the completion of
the PROJECT, whichever comes first (emphasis supplied).
From the foregoing discussion it is apparent that Kiamco was correctly labeled by the NLRC as a project employee. The basis for
this conclusion is indeed well-founded. The three (3) Contracts of Employment entered into by Kiamco clearly established that he was
a project employee because (a) he was specifically assigned to work for a particular project, which was the Geothermal Agro-Industrial
Demonstration Plant Project of private respondents, and (b) the termination and the completion of the project or undertaking was
determined and stipulated in the contract at the time of his employment.
The next issue to be addressed is whether petitioner Kiamco, as a project employee, is entitled to reinstatement and payment of
back wages. Private respondents postulate that Kiamco could not be reinstated for the following reasons: (a) Kiamco was not a regular
employee; (b) the position had already been abolished; (c) petitioner failed to substantiate his claim that the project was still on-going;
and, (d) the separation of Kiamco from his employment was not exactly cordial, incurring the ire and anger of both his co-workers and
superiors.[18]
[19]
In Santos v. NLRC we said -
The normal consequences of a finding that an employee has been illegally dismissed are, that the employee becomes entitled to
reinstatement to his former position without loss of seniority rights and the payment of back wages.
Reinstatement restores the employee who was unjustly dismissed to the position from which he was removed, that is, to his status quo
ante dismissal; while the grant of back wages allows the same employee to recover from the employer that which he had lost by way
of wages as a result of his dismissal.
The argument of private respondents that reinstatement and payment of back wages could not be made since Kiamco was not a
regular employee is apparently misplaced. As quoted above, the normal consequences of an illegal dismissal are the reinstatement of the
aggrieved employee and the grant of back wages. These rights of an employee do not depend on the status of his employment prior to
his dismissal but rather to the legality and validity of his termination. The fact that an employee is not a regular employee does not mean
that he can be dismissed any time, even illegally, by his employer.
It cannot be gainsaid that the dismissal of an employee should be for any of the just and authorized causes enumerated in the
Labor Code.[20] However, petitioners case no proof or evidence was ever presented by private respondents to justify his termination. On
the contrary, they relied solely on the expiration of the employment contract to legitimize his termination, instead of the administrative
infractions he allegedly committed, thus abandoning altogether any valid cause private respondents might have under the Labor Code
that could justify his dismissal.
In De la Cruz v. NLRC[21] we held -
In termination cases, the burden of proving just and valid cause for dismissing an employee from his employment rests upon the
employer, and the latters failure to do so results in finding that the dismissal is unjustified.
Furthermore, private respondents not only failed to give a valid and justifiable reason to terminate Kiamco, but they also ignored
the due process requirement of the law. Due process in termination cases requires the employer to furnish the worker or employee sought
to be dismissed with two (2) written notices, i.e., a notice which apprises the employee of the particular acts or omissions for which his
dismissal is sought, and a subsequent notice which informs the employee of the employers decision to dismiss him.
The records show that the second written notice informing petitioner of his actual dismissal was not complied with. When Kiamco
returned to work he was bluntly informed by private respondents that he was already terminated due to the expiration of his employment
contract. Indeed, the failure of private respondents to comply with the due process requirement further tainted Kiamcos dismissal with
irregularity.[22]
While it is true that in some cases, among which are Wenphil Corp. v. NLRC[23]andRubberworld (Phils.) v. NLRC,[24] the lack of
due process before the dismissal of the employee was deemed corrected by the subsequent administrative proceedings where the
dismissed employee was given a chance to be heard, those cases involved dismissals that were later proved to be for a valid
cause. However, the doctrine in those cases is not applicable to the case at bar because Kiamcos dismissal was not proved by private
respondents to be for any valid or justifiable cause.[25]
Nonetheless even if the last contract signed by Kiamco fixed the term of his employment from 1 May 1993 to 31 October 1993,
this did not give private respondent corporations the unbridled authority to terminate Kiamco upon the expiration thereof. As discussed
earlier, Kiamco was a project employee who was specifically assigned to work in a particular project. Therefore, in the absence of any
valid reason to terminate him, private respondents should have retained his services until the actual completion of the project. We ruled
in De Ocampo, Jr. v. NLRC[26]-
x x x x the record shows that although the contracts of the project workers had indeed expired, the project itself was still on-going and
so continued to require the workers services for its completion. There is no showing that such services were unsatisfactory to justify
their termination. This is not even alleged x x x. One can therefore only wonder why, in view of these circumstances, the contract
workers were not retained to finish the project they had begun and were still working on x x x x
Private respondent corporations further argue that reinstatement was no longer be possible since the position had already been
abolished for being unnecessary. But, it was correctly pointed by the NLRC that -
The respondents other theory of abolition of position for being no longer necessary deserves scant consideration. An examination of
the three contracts of employment of the complainant show that the complainant has always been task(ed) to perform the following
comprehensive functions:
To provide assistance in the installation, operation and maintenance of the plant which include installation, operation of plant
equipment, handling of raw materials and safekeeping of all equipment, tools, service vehicle, and supplies in the project area. He will
also x x x be tasked to service the transportation requirements in the project site when required.
It is clear from the above stipulated duties that the complainants service is needed until the full completion of the so-called Geothermal
Agroindustrial Demonstration Project. It is unrefuted on record that when complainants service was terminated, work in the project
was still going on. In fact, the respondents failed to show proof as to when it was completed. [27]
11
 Thus, the argument that petitioner could no longer be reinstated since he failed to substantiate the existence of the project is
untenable. The burden of proving that petitioner Kiamco is not entitled to reinstatement rests on private respondent corporations. Being
the employer, the private respondents would have in their possession the necessary documents and proof to show that the project had
already been terminated. The NLRC even commented in its assailed resolution that in fact private respondents failed to show proof as
to when the project was completed.[28]
Lastly, private respondents argue against reinstatement on the basis of the strained relations principle. They claim that after the
termination of Kiamco he had incurred the ire and anger of his co-employees and superiors. In this regard, it may be worth to mention
that in Globe-Mackay Cable and Radio Corp. v. NLRC[29] this Court qualified the application of the strained relations principle when it
held -
If in the wisdom of the Court, there may be a ground or grounds for the nonapplication of the above-cited provision (Art. 279, Labor
Code) this should be by way of exception, such as when the reinstatement may be inadmissible due to ensuing strained relations
between the employer and employee.
In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his
employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the
efficiency and productivity of the employee concerned x x x x Obviously, the principle of strained relations cannot be applied
indiscriminately. Otherwise, reinstatement can never be possible simply because some hostility is invariably engendered between the
parties as a result of litigation. That is human nature.
Besides, no strained relations should arise from a valid legal act of asserting ones right; otherwise an employee who shall assert his
right could be easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his
employer had already become strained.
Finally, as to the claim of moral and exemplary damages, jurisprudence is replete with cases holding that moral damages are
recoverable only where the dismissal of the employee was attended with bad faith or fraud or constituted an act oppressive to labor or
was done in a manner contrary to morals, good custom or public policy. Exemplary damages, on the other hand, may be awarded only
if the dismissal was effected in a wanton, oppressive or malevolent manner. The evidence on record does not show any fraud, malice or
bad faith on the part of private respondents that would justify payment to petitioner of moral and exemplary damages.
WHEREFORE, the assailed Resolution of public respondent NLRC dated 23 January 1997 modifying its earlier Decision of 27
September 1996 in NLRC Case No. V-0316-9 is MODIFIED. Private respondents Philippine National Oil Company (PNOC) and
PNOC-Energy Development Corporation (PNOC-EDC) are ORDERED to REINSTATE petitioner Cisell A. Kiamco immediately to
his former position without loss of seniority rights and privileges with full back wages from the date of his dismissal until his actual
reinstatement.Costs against private respondents.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-54136 December 21, 1983
PHILIPPINE JAI-ALAI & AMUSEMENT CORPORATION, petitioner,
vs.
HON. JACOBO C. CLAVE, in his capacity as Presidential Executive Assistant, HON. AMADO G. INCIONG, in his capacity
as Deputy Minister of Labor, HON. VICENTE LEOGARDO, JR., in his capacity as Assistant Minister of Labor, RUFINO
CADATAL, JR. and ANTONIO DELGRA, respondents.
Abad, Bonifacio, Legayada & Associates for petitioner.
The Solicitor General for public respondents.
Dante P. Mercado for private respondents.
MELENCIO-HERRERA, J.:
This is a Petition for certiorari with Preliminary Injunction seeking to annul: 1) the Order of public respondent Vicente Leogardo, Jr.,
then Assistant Secretary of Labor, dated December 24, 1976, in Case No. R-04-12-11832-76-LS entitled "Rufino Cadatal, Jr. and
Antonio Delgra, Complainants, vs. Philippine Jai-Alai and Amusement Corporation, Respondent," directing the reinstatement of said
complainants with full backwages from the time of their dismissal up to their actual reinstatement and without loss of seniority rights;
2) the Order of public respondent Amado G. Inciong, then Deputy Minister of Labor, dated July 13, 1977, affirming the said Decision;
3) the Decision of respondent Jacobo C. Clave as Presidential Executive Assistant, dated January 25, 1979, also affirming the appealed
Order; and 4) the denials on March 19, 1979 and June 5, 1980 by said Office of petitioner's Motions for Reconsideration.
From the record, the facts relative to this case may be stated as follows: Petitioner is a corporation operating a jai-alai front on for sport
and amusement. It has its own maintenance group for the upkeep of its premises. For the renovation of its main building, which work
is not included in maintenance, it hired private respondents, Cadatal, Jr., a plumber, and Delgra, a mason, together with 30 other
workers on February 2, 1976 for a period of one month, to continue even after that period should their services be needed further in the
renovation work. This renovation was completed by the end of October 1976. However, management decided to construct an Annex to
the Building, and private respondents were assigned to work on a fire escape. On November 17, 1976, private respondents received
notice of termination effective November 29, 1976, but since minor repairs were still needed, they worked up to December 11, 1976
and were fully paid for their labor up to that date.
On December 13, 1976, petitioner filed with the former Department of Labor a report of termination of the services of private
respondents and 30 others, due to completion of the project. The report listed them as "casual emergency workers."
A letter-complaint, dated December 13, 1976, was filed by private respondents with Regional Office No. 4 of the then Department of
Labor, alleging termination without cause. On December 21, 1976, petitioner was summoned to appear before the Hearing Officer
without being informed of the subject matter of the investigation. At the next hearing on December 23, 1976, petitioner was formally
furnished copy of the letter complaint. Petitioner was given tune to file an Answer on or before December 27, 1976, which it did. But
before the Answer could be filed, a summary Order was issued by respondent Leogardo. Jr., dated December 24, 1976 for
reinstatement with full backwages. stating that the nature of the jobs performed by private respondents was necessary and desirable in
the usual business or trade of petitioner; that they are regular employees pursuant to Article 170 (now Article 281) of the Labor Code;
and that their termination was without just cause.
The Order of December 24, 1976 was, on appeal, affirmed by respondent Inciong in an Order dated July 13, 1977. This Order was in
turn appealed to the Office of the President. The appeal was dismissed for lack of merit by respondent Clave on January 25, 1979,
reiterating that the nature of private respondents' employment as maintenance helpers was necessary and/or desirable to petitioner's
business and that the dismissal was in violation of Article 281 of the Labor Code. Petitioner's Motion for Reconsideration was denied
on March 19, 1979. On April 26, 1980, an Alias Writ of Execution was issued to collect from petitioner corporation the total amount
of P26,260.00, representing private respondents' full backwages. And, on June 5, 1980, a second Motion for Reconsideration dated
April 24, 1980, was denied by respondent Clave, since only one such Motion is allowed and the grounds invoked were substantially
the same as those previously raised.
This Petition for certiorari with Preliminary Injunction was filed on June 27, 1980. A temporary restraining order was issued By this
Court on July 7, 1980, enjoining the respondents from implementing the Order, dated December 24, 1976, as well as subsequent
Orders. On November 12, 1980, we gave due Course to the Petition and required the submittal of simultaneous memoranda, which has
been complied with by petitioner but not by private respondents.
12
Pivotal to the resolution of toes controversy is the issue of whether or not private respondents are regular employees entitled to that the objections premised on lack of respect for the due process guarantee lack support
security of tenure. They maintain that they are, while petitioner contends that they are merely casual emergency workers employed for in the record (citing Demaronsing vs. Tandayag, 58 SCRA 484; De Borj a vs. Flores, 62
a particular job. Phil. 106; Batangas Laguna Tayabas Co. vs. Cadiao, 22 SCRA 987)'." 6

The pertinent proposition of the Labor Code, as amended, reads:
Art. 281. Regular and Casual Employment. — 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, except where the employment has been fixed for a specific project
or undertaking, the completion or termination of which has been determined at the time of the engagement of
the employee or where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That,
any employee who has rendered at least one year of service, whether such service is continuous or broken, shall
be considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such actually exists.
But here, the judgment below is being reversed because public respondents had overlooked certain facts of significance, notably,
private respondents' employment for a specific project and other small jobs fake the erection of the fire escape which cannot be
deemed as maintenance, the existence of a regular maintenance force in petitioner corporation, their services for less than one year,
and the circumstance that their thirty other co-workers accepted their termination without question, all of which are sufficient to alter
the questioned Order.
WHEREFORE, the Order of public respondent Vicente Leogardo, Jr., dated December 24, 1976, and the Orders of the other public
respondents dated July 13, 1977, January 25, 1979, March 19, 1979, and June 5, 1980, are hereby reversed and set aside. The
Complaint for illegal dismissal against petitioner in Case No. R-04-12-11832-76 LS (Regional Office No. IV, Department of Labor) is
dismissed, and the Temporary Restraining Order heretofore issued is hereby made permanent.
No costs.
SO ORDERED.

Private respondents were hired for a specific project to renovate the main building, where major repairs such as painting the main
Republic of the Philippines
building, repair of the roof, cleaning of clogged water pipes and drains, and other necessary repairs were required. 1 It was made
SUPREME COURT
known, and so understood at the start of the hiring, that their services would last until the completion of the renovation. 2 They
Manila
rendered service from February 2 to December 11, 1976, almost 11 months, but less than a year. In its Report to the Department of
Labor, petitioner gave the reason for termination as "due to termination of project. 3 It was only private respondents Cadatal, Jr. and
Delgra, out of the 32 hired for the renovation, who questioned their termination, the 30 other workers having acquiesced to their SECOND DIVISION
termination. Private respondents merely alleged in their letter-complaint that "kami'y inalis sa trabaho ng walang dahilan." 4 There
could be no other reason, however, than that the termination of private respondents was because their services were no longer needed
and they had nothing more to do since the project for which they were hired had been completed. The fact was not that private G.R. No. L-65689 May 31, 1985
respondents were hired as maintenance helpers, because petitioner corporation had a regular maintenance force. 5 Private respondents,
as well as the other 30 workers, were needed as additional hands for the other small jobs after the renovation cannot be deemed SANDOVAL SHIPYARDS, INC., petitioner,
maintenance but more of casual work. vs.
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO DIAMANTE, MANUEL PACRES, ROLANDO
The casual or limited character of private respondents' employment, therefore, is evident. They were engaged for a specific project or CERVALES, DIONISIO CERVALES and MACARIO SAPUTALO, respondents.
undertaking and fall within the exception provided for in Article 281 of the Labor Code, supra. Not being regular employees, it cannot
be justifiably said that petitioner had dismissed them without just cause. They are not entitled to reinstatement with full backwages. G.R. No. L-66119 May 31, 1985

Lastly, although no longer necessary to the resolution of the petition, it is claimed by petitioner that it was denied due process of law, SANDOVAL SHIPYARDS, INC., petitioner,
since the case below could not be the subject of a summary judgment as questions of fact and law are involved, and that even before vs.
the petitioner could file its Answer, a summary judgment was rendered by respondent Leogardo. VICENTE LEOGARDO, JR., Deputy Minister of Labor and Employment, DANILO DE LA CRUZ, RODRIGO VILLARUZ,
RODRIGO PEREZ, AQUILINO TABILON, ARMANDO ESGLANDA, MANUEL MEDINA, FREDDIE ABADIEZ,
The comment of the Solicitor General on this point is hereunder quoted. FELICIANO TOLANG, ALFREDO DE LA CRUZ, NICOLAS MARIANO, VICENTE CEBUANO, ROLANDO ROLDAN,
TEODORO ROLDAN, SOLOMON GEMINO, MARIO RICAFORT, ROLANDO LOPEZ and ANGEL
SAMSON, respondents.
Besides, even granting arguendo that there was no hearing before respondent Leogardo, it cannot be denied that
petitioner had lie opportunity to present its own case and submit evidence in support thereof. From the decision
of respondent Leogardo, petitioner filed a 10-page appeal to the Secretary of Labor, attaching thereto as Annex Abad Santos, Sunga & Associates for petitioner.
'B' its Reply/Opposition to the complaint. From respondent Inciong's decision, petitioner filed a 7-page appeal
with the Office of the President, Thus, on two occasions, petitioner was allowed to present and intelligibly argue Neva Blancaver for private respondents.
the merits of its case. As held in Maglasang v. Ople ( 63 SCRA 508):

It is thus apparent that even granting the absence of any hearing at the stage of mediation
and fact-finding, petitioner was afforded the occasion to explain matters fully and present
its side of the controversy twice, the first time in his appeal with respondent Commission AQUINO, J:
and thereafter in the review conducted by respondent Secretary of Labor. It would follow

13
These cases are about the dismissal of alleged project workers. Sandoval Shipyards, Inc. has been engaged in the building and repair of
vessels. It contends that each vessel is a separate project and that the employment of the workers is terminated with the completion of
each project.
The workers contend otherwise. They claim to be regular workers and that the termination of one project does not mean the end of
their employment since they can be assigned to unfinished projects.
In G.R. No. 65689, Rogelio Diamante, Manuel Pacres, Macario Saputalo, Rolando Cervales and Dionisio Cervales were assigned to
the construction of the LCT Catarman, Project No. 7511. After three months of work, the project was completed on July 26, 1979. The
five workers were served a termination notice. The termination was reported to the Ministry of Labor on August 3, 1979. They filed a
complaint for illegal dismissal.
The National Labor Relations Commission affirmed the decision of the Labor Arbiter ordering the reinstatement of the five
complainants with backwages from July 27, 1979.
In G.R. No. 66119, respondents Danilo de la Cruz, et al., 17 in all, were assigned to work in Project No. 7901 for the construction of a
tanker ordered by Mobil Oil Philippines, Inc. There were 55 workers in that project. The tanker was launched on January 31, 1980.
Upon the yard manager's recommendation, the personnel manager of Sandoval Shipyards terminated the services of the welders,
helpers and construction workers effective February 4, 1980. The termination was duly reported to the Ministry of Labor and
Employment.
Three days later, or on February 7, twenty-seven out of the 55 workers were hired for a new project. The 27 included four of the 17
respondents who filed a complaint for illegal dismissal on February 6.
After hearing, the Director of the Ministry's Capital Region ordered the reinstatement of the complainants. The Deputy Minister of
Labor affirmed that order.
We hold that private respondents were project employees whose work was coterminous with the project for which they were hired.
Project employees, as distinguished from regular or non-project employees, are mentioned in section 281 of the Labor Code as those
"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."
Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer-employee relations in the construction
industry, provides:
Project employees are those employed in connection with a particular construction project. Non-project
(regular) employees are those employed by a construction company without reference to any particular project.
Project employees are not entitled to termination pay if they are terminated as a result of the completion of the
project or any phase thereof in which they are employed, regardless of the number of projects in which they
have been employed by a particular construction company. Moreover, the company is not required to obtain
clearance from the Secretary of Labor in connection with such termination.
The petitioner cited three of its own cases wherein the National Labor Relations Commission, Deputy Minister of Labor and
Employment Inciong and the Director of the National Capital Region held that the layoff of its project employees was lawful. Deputy
Minister Inciong in TFU Case No. 1530, In Re Sandoval Shipyards, Inc. Application for Clearance to Terminate Employees, rendered
the following ruling on February 26,1979:
We feel that there is merit in the contention of the applicant corporation. To our mind, the employment of the
employees concerned were fixed for a specific project or undertaking. For the nature of the business the
corporation is engaged into is one which will not allow it to employ workers for an indefinite period.
It is significant to note that the corporation does not construct vessels for sale or otherwise which will demand
continuous productions of ships and will need permanent or regular workers. It merely accepts contracts for
ship-building or for repair of vessels from third parties and, only, on occasion when it has work contract of this
nature that it hires workers to do the job which, needless to say, lasts only for less than a Year or longer.
The completion of their work or project automatically terminates their employment, in which case, the
employer is, under the law, only obliged to render a report on the termination of the employment. (139-140,
Rollo of G. R. No. 65689).
In NLRC Case No. RB-IV-7743-76, Nicanor San Pedro, et. al. vs. Sandoval Shipyards, Inc., the NLRC in its resolution of May 16,
1978 held that the layoff of the 17 complainants (which include three respondents in G.R. No. 65689 and two respondents in G.R. No.
66119) after the construction of the tanker, M/T Oil Queen VII, in July, 1976 was justified because they were project employees (135-
138, Rollo of G.R. No. 65689).
In Gaspar vs. Sandoval Shipyards, Inc., NCR-STF-3-184081, Director Estrella held in his order dated June 22, 1981 that two workers
of the petitioner were project workers whose employment was terminated upon the completion of the Project eject.
Respondent Deputy Minister Leogardo, Jr. himself on October 25, 1984 affirmed that finding. He ruled that the complainants "are
project workers whose employments are coterminous with the completion of the project, regardless of the number of projects in which
they have worked, as provided under Policy Instructions No. 20 of the Ministry of Labor and Employment" and "as their employment
is one for a definite period, they are not entitled to separation pay." (187, Rollo of G.R. No. 65689)
The public respondents in the instant two cases acted with grave abuse of discretion amounting to lack of jurisdiction in disregarding
these precedents.
WHEREFORE, the NLRC resolution dated July 29, 1983 and the order of Deputy Minister Leogardo, Jr., dated March 15, 1983 are
reversed and set aside. The complaints for illegal layoff are dismissed. No costs.
SO ORDERED
SECOND DIVISION
[G.R. No. 114734. March 31, 2000]
VIVIAN Y. IMBUIDO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, INTERNATIONAL
INFORMATION SERVICES, INC. and GABRIEL LIBRANDO, respondents.
DECISION
BUENA, J.:
This special civil action for certiorari seeks to set aside the Decision[1] of the National Labor Relations Commission (NLRC)
promulgated on September 27, 1993 and its Order dated January 11, 1994, which denied petitioners motion for reconsideration. Scslx
Petitioner was employed as a data encoder by private respondent International Information Services, Inc., a domestic corporation
engaged in the business of data encoding and keypunching, from August 26, 1988 until October 18, 1991 when her services were
terminated. From August 26, 1988 until October 18, 1991, petitioner entered into thirteen (13) separate employment contracts with
private respondent, each contract lasting only for a period of three (3) months. Aside from the basic hourly rate, specific job contract
number and period of employment, each contract contains the following terms and conditions: Slxsc
14
 "a. This Contract is for a specific project/job contract only and shall be effective for the period covered as
above-mentioned unless sooner terminated when the job contract is completed earlier or withdrawn by client, or
when employee is dismissed for just and lawful causes provided by law. The happening of any of these events
will automatically terminate this contract of employment. Slxmis
"b. Subject shall abide with the Companys rules and regulations for its employees attached herein to form an
integral part hereof.
"c. The nature of your job may require you to render overtime work with pay so as not to disrupt the Companys
commitment of scheduled delivery dates made on said job contract."[2]
In September 1991, petitioner and twelve (12) other employees of private respondent allegedly agreed to the filing of a petition for
certification election involving the rank-and-file employees of private respondent.[3] Thus, on October 8, 1991, Lakas Manggagawa sa
Pilipinas (LAKAS) filed a petition for certification election with the Bureau of Labor Relations (BLR), docketed as NCR-OD-M-
9110-128.[4]
Subsequently, on October 18, 1991, petitioner received a termination letter from Edna Kasilag, Administrative Officer of private
respondent, allegedly "due to low volume of work."[5]
Thus, on May 25, 1992, petitioner filed a complaint for illegal dismissal with prayer for service incentive leave pay and 13th month
differential pay, with the National Labor Relations Commission, National Capital Region, Arbitration Branch, docketed as NLRC-
NCR Case No. 05-02912-92.[6]
In her position paper dated August 3, 1992 and filed before labor arbiter Raul T. Aquino, petitioner alleged that her employment was
terminated not due to the alleged low volume of work but because she "signed a petition for certification election among the rank and
file employees of respondents," thus charging private respondent with committing unfair labor practices. Petitioner further complained
of non-payment of service incentive leave benefits and underpayment of 13th month pay. [7]
On the other hand, private respondent, in its position paper filed on July 16, 1992, maintained that it had valid reasons to terminate
petitioners employment and disclaimed any knowledge of the existence or formation of a union among its rank-and-file employees at
the time petitioners services were terminated.[8] Private respondent stressed that its business "relies heavily on companies availing of
its services. Its retention by client companies with particular emphasis on data encoding is on a project to project basis,"[9] usually
lasting for a period of "two (2) to five (5) months." Private respondent further argued that petitioners employment was for a "specific
project with a specified period of engagement." According to private respondent, "the certainty of the expiration of complainants
engagement has been determined at the time of their (sic) engagement (until 27 November 1991) or when the project is earlier
completed or when the client withdraws," as provided in the contract.[10] "The happening of the second event [completion of the
project] has materialized, thus, her contract of employment is deemed terminated per the Brent School ruling." [11] Finally, private
respondent averred that petitioners "claims for non-payment of overtime time (sic) and service incentive leave [pay] are without
factual and legal basis."[12]
In a decision dated August 25, 1992, labor arbiter Raul T. Aquino, ruled in favor of petitioner, and accordingly ordered her
reinstatement without loss of seniority rights and privileges, and the payment of backwages and service incentive leave pay. The
dispositive part of the said decision reads: Missdaa
"WHEREFORE, responsive to the foregoing, judgment is hereby rendered ordering respondents to
immediately reinstate complainant [petitioner herein] as a regular employee to her former position without loss
of seniority rights and privileges and to pay backwages from the time of dismissal up to the date of this decision,
the same to continue until complainant [s] [petitioner herein] actual reinstatement from (sic) the service.
Respondents are likewise ordered to pay complainant [petitioner herein] service incentive leave pay computed
as follows: Sdaadsc
Backwages:
10/18/91 8/25/92 = 10.23 mos.
P118.00 x 26 x 10.23 mos. = P31, 385.64
Service Incentive Leave Pay
1989 = P89.00 x 5 days = P445.00
1990 = 106 x 5 days = P530.00
1991 = 118 x 5 days = P590.00
P 1, 565.00
Total P32, 950.64
SO ORDERED."[13]
In his decision, the labor arbiter found petitioner to be a regular employee, ruling that "[e]ven if herein complainant [petitioner herein]
had been obstensively (sic) hired for a fixed period or for a specific undertaking, she should be considered as [a] regular employee of
the respondents in conformity with the provisions (sic) laid down under Article 280 of the Labor Code,"[14] after finding that "[i]t is
crystal clear that herein complainant [petitioner herein] performed a job which are (sic) usually necessary or desirable in the usual
business of respondent [s]."[15] The labor arbiter further denounced "the purpose behind the series of contracts which respondents
required complainant to execute as a condition of employment was to evade the true intent and spirit of the labor laws for the
workingmen."[16] Furthermore, the labor arbiter concluded that petitioner was illegally dismissed because the alleged reason for her
termination, that is, low volume of work, is "not among the just causes for termination recognized by law," [17] hence, he ordered her
immediate reinstatement without loss of seniority rights and with full backwages. With regard to the service incentive leave pay, the
labor arbiter decided "to grant the same for failure of the respondents to fully controvert said claims."[18] Lastly, the labor arbiter
rejected petitioners claim for 13th month pay "since complainant [petitioner herein] failed to fully substantiate and argued (sic) the
same."[19]
On appeal, the NLRC reversed the decision of the labor arbiter in a decision [20]promulgated on September 27, 1993, the dispositive
part of which reads:
"WHEREFORE, the appealed decision is hereby set aside. The complaint for illegal dismissal is hereby
dismissed for being without merit. Complainants [petitioner herein] claim for service incentive leave pay is
hereby remanded for further arbitration.
SO ORDERED."[21]
The NLRC ruled that "[t]here is no question that the complainant [petitioner herein], viewed in relation to said Article 280 of the
[Labor] Code, is a regular employee judging from the function and/or work for which she was hired. xxx xxx. But this does not
necessarily mean that the complainant [petitioner herein] has to be guaranteed a tenurial security beyond the period for which she was
hired."[22] The NLRC held that the complainant [petitioner herein], while hired as a regular worker, is statutorily guaranteed, in her
tenurial security, only up to the time the specific project for which she was hired is completed." [23] Hence, the NLRC concluded that
"[w]ith the specific project "at RCBC 014" admittedly completed, the complainant [petitioner herein] has therefore no valid basis in
charging illegal dismissal for her concomittant (sic) dislocation."[24]
In an Order dated January 11, 1994, the NLRC denied petitioners motion for reconsideration. [25]
15
In this petition for certiorari, petitioner, for and in her behalf, argues that (1) the public respondent "committed grave abuse of
discretion when it ignored the findings of Labor Arbiter Raul Aquino based on the evidence presented directly before him, and when it
made findings of fact that are contrary to or not supported by evidence,"[26] (2) "[p]etitioner was a "regular employee," NOT a "project
employee" as found by public respondent NLRC,"[27] (3) "[t]he termination of petition (sic) was tainted with unfair labor
practice,"[28] and (4) the public respondent "committed grave abuse of discretion in remanding the awarded service incentive leave pay
for further arbitration."[29]
The petition is impressed with merit. Sdaadsc
We agree with the findings of the NLRC that petitioner is a project employee. The principal test for determining whether an employee
is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or
undertaking, the duration and scope of which were specified at the time the employee was engaged for that project.[30] A project
employee is one whose 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.[31] In the instant case, petitioner was engaged to perform activities which were
usually necessary or desirable in the usual business or trade of the employer, as admittedly, petitioner worked as a data encoder for
private respondent, a corporation engaged in the business of data encoding and keypunching, and her employment was fixed for a
specific project or undertaking the completion or termination of which had been determined at the time of her engagement, as may be
observed from the series of employment contracts[32] between petitioner and private respondent, all of which contained a designation
of the specific job contract and a specific period of employment.
However, even as we concur with the NLRCs findings that petitioner is a project employee, we have reached a different conclusion. In
the recent case of Maraguinot, Jr. vs. NLRC,[33] we held that "[a] project employee or a member of a work pool may acquire the status
of a regular employee when the following concur:Rtcspped
1) There is a continuous rehiring of project employees even after [the] cessation of a project;[34] and
2) The tasks performed by the alleged "project employee" are vital, necessary and indispensable to the usual
business or trade of the employer.[35]"
The evidence on record reveals that petitioner was employed by private respondent as a data encoder, performing activities which are
usually necessary or desirable in the usual business or trade of her employer, continuously for a period of more than three (3) years,
from August 26, 1988 to October 18, 1991[36] and contracted for a total of thirteen (13) successive projects. We have previously ruled
that "[h]owever, the length of time during which the employee was continuously re-hired is not controlling, but merely serves as a
badge of regular employment."[37] Based on the foregoing, we conclude that petitioner has attained the status of a regular employee of
private respondent.
At this point, we reiterate with emphasis that: Korte
"xxx xxx
"At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a duty to re-
hire a project employee even after completion of the project for which he was hired. The import of this decision
is not to impose a positive and sweeping obligation upon the employer to re-hire project employees. What this
decision merely accomplishes is a judicial recognition of the employment status of a project or work pool
employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the employer of
project or work pool employees who perform tasks necessary or desirable to the employer's usual
business or trade. Let it not be said that this decision "coddles" labor, for as Lao[38] has ruled, project or work
pool employees who have gained the status of regular employees are subject to the "no work-no pay"
principle, to repeat:
"A work pool may exist although the workers in the pool do not receive salaries and are free to seek other
employment during temporary breaks in the business, provided that the worker shall be available when called to
report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be
applied to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to
both the employer and employee for it prevents the unjust situation of "coddling labor at the expense of capital"
and at the same time enables the workers to attain the status of regular employees. Sclaw
"The Court's ruling here is meant precisely to give life to the constitutional policy of strengthening the labor
sector, but, we stress, not at the expense of management. Lest it be misunderstood, this ruling does not mean
that simply because an employee is a project or work pool employee even outside the construction industry, he
is deemed, ipso jure, a regular employee. All that we hold today is that once a project or work pool
employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the
same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual
business or trade of the employer, then the employee must be deemed a regular employee, pursuant to
Article 280 of the Labor Code and jurisprudence. To rule otherwise would allow circumvention of labor
laws in industries not falling within the ambit of Policy Instruction No. 20/Department Order No. 19,
hence allowing the prevention of acquisition of tenurial security by project or work pool employees who
have already gained the status of regular employees by the employer's conduct." [39](emphasis supplied)
Being a regular employee, petitioner is entitled to security of tenure and could only be dismissed for a just or authorized cause, as
provided in Article 279 of the Labor Code, as amended: Sclex
"Art. 279. Security of Tenure In cases of regular employment, the employer shall not terminate the services of
an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement."
The alleged causes of petitioners dismissal (low volume of work and belatedly, completion of project) are not valid causes for
dismissal under Articles 282 and 283 of the Labor Code. Thus, petitioner is entitled to reinstatement without loss of seniority rights
and other privileges, and to her full backwages, inclusive of allowances, and to her other benefits or their monetary equivalent
computed from the time her compensation was withheld from her up to the time of her actual reinstatement. However, complying with
the principles of "suspension of work" and "no work, no pay" between the end of one project and the start of a new one, in computing
petitioners backwages, the amounts corresponding to what could have been earned during the periods from the date petitioner was
dismissed until her reinstatement when private respondent was not undertaking any project, should be deducted. Xlaw
With regard to petitioners claim for service incentive leave pay, we agree with the labor arbiter that petitioner is entitled to service
incentive leave pay, as provided in Article 95 of the Labor Code, which reads:
"Article 95 Right to service incentive leave
(a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive
leave of five days with pay.
xxx xxx xxx."
Having already worked for more than three (3) years at the time of her unwarranted dismissal, petitioner is undoubtedly entitled to
service incentive leave benefits, computed from 1989 until the date of her actual reinstatement. As we ruled in the recent case
of Fernandez vs. NLRC,[40] "[s]ince a service incentive leave is clearly demandable after one year of service whether continuous or
broken or its equivalent period, and it is one of the "benefits" which would have accrued if an employee was not otherwise illegally
dismissed, it is fair and legal that its computation should be up to the date of reinstatement as provided under Section [Article] 279 of
the Labor Code, as amended, which reads: Xsc
"ART. 279. Security of Tenure. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of
16
 allowances, and to his other benefits or their monetary equivalent computed from the time his compensation
is withheld from him up to the time of his actual reinstatement." (emphasis supplied).
WHEREFORE, the instant petition is GRANTED. The assailed decision of the National Labor Relations Commission in NLRC NCR
CA No. 003845-92 dated September 27, 1993, as well as its Order dated January 11, 1994, are hereby ANNULLED and SET ASIDE
for having been rendered with grave abuse of discretion, and the decision of the Labor Arbiter in NLRC NCR Case No. 05-02912-92
is REINSTATED with MODIFICATION as above-stated, with regard to the computation of back wages and service incentive leave
pay. Sc
SO ORDERED.
FIRST DIVISION
[G.R. No. 150793. November 19, 2004]
FRANCIS CHUA, petitioner, vs. HON. COURT OF APPEALS and LYDIA C. HAO, respondents.
DECISION
QUISUMBING, J.:
Petitioner assails the Decision,[1] dated June 14, 2001, of the Court of Appeals in CA-G.R. SP No. 57070, affirming the Order,
dated October 5, 1999, of the Regional Trial Court (RTC) of Manila, Branch 19. The RTC reversed the Order, dated April 26, 1999, of
the Metropolitan Trial Court (MeTC) of Manila, Branch 22. Also challenged by herein petitioner is the CA Resolution,[2] dated
November 20, 2001, denying his Motion for Reconsideration.
The facts, as culled from the records, are as follows:
On February 28, 1996, private respondent Lydia Hao, treasurer of Siena Realty Corporation, filed a complaint-affidavit with the
City Prosecutor of Manila charging Francis Chua and his wife, Elsa Chua, of four counts of falsification of public documents pursuant
to Article 172[3] in relation to Article 171[4] of the Revised Penal Code. The charge reads:
That on or about May 13, 1994, in the City of Manila, Philippines, the said accused, being then a private individual, did then and there
willfully, unlawfully and feloniously commit acts of falsification upon a public document, to wit: the said accused prepared, certified,
and falsified the Minutes of the Annual Stockholders meeting of the Board of Directors of the Siena Realty Corporation, duly
notarized before a Notary Public, Atty. Juanito G. Garcia and entered in his Notarial Registry as Doc No. 109, Page 22, Book No. IV
and Series of 1994, and therefore, a public document, by making or causing it to appear in said Minutes of the Annual Stockholders
Meeting that one LYDIA HAO CHUA was present and has participated in said proceedings, when in truth and in fact, as the said
accused fully well knew that said Lydia C. Hao was never present during the Annual Stockholders Meeting held on April 30, 1994 and
neither has participated in the proceedings thereof to the prejudice of public interest and in violation of public faith and destruction of
truth as therein proclaimed.
CONTRARY TO LAW.[5]
[6]
Thereafter, the City Prosecutor filed the Information docketed as Criminal Case No. 285721 for falsification of public document,
before the Metropolitan Trial Court (MeTC) of Manila, Branch 22, against Francis Chua but dismissed the accusation against Elsa Chua.
Herein petitioner, Francis Chua, was arraigned and trial ensued thereafter.
During the trial in the MeTC, private prosecutors Atty. Evelyn Sua-Kho and Atty. Ariel Bruno Rivera appeared as private
prosecutors and presented Hao as their first witness.
After Haos testimony, Chua moved to exclude complainants counsels as private prosecutors in the case on the ground that Hao
failed to allege and prove any civil liability in the case.
In an Order, dated April 26, 1999, the MeTC granted Chuas motion and ordered the complainants counsels to be excluded from
actively prosecuting Criminal Case No. 285721. Hao moved for reconsideration but it was denied.
Hence, Hao filed a petition for certiorari docketed as SCA No. 99-94846,[7]entitled Lydia C. Hao, in her own behalf and for the
benefit of Siena Realty Corporation v. Francis Chua, and the Honorable Hipolito dela Vega, Presiding Judge, Branch 22, Metropolitan
Trial Court of Manila, before the Regional Trial Court (RTC) of Manila, Branch 19.
The RTC gave due course to the petition and on October 5, 1999, the RTC in an order reversed the MeTC Order. The dispositive
portion reads:
WHEREFORE, the petition is GRANTED. The respondent Court is ordered to allow the intervention of the private prosecutors in
behalf of petitioner Lydia C. Hao in the prosecution of the civil aspect of Crim. Case No. 285721, before Br. 22 [MeTC], Manila,
allowing Attys. Evelyn Sua-Kho and Ariel Bruno Rivera to actively participate in the proceedings.
SO ORDERED.[8]
Chua moved for reconsideration which was denied.
Dissatisfied, Chua filed before the Court of Appeals a petition for certiorari. The petition alleged that the lower court acted with
grave abuse of discretion in: (1) refusing to consider material facts; (2) allowing Siena Realty Corporation to be impleaded as co-
petitioner in SCA No. 99-94846 although it was not a party to the criminal complaint in Criminal Case No. 285721; and (3) effectively
amending the information against the accused in violation of his constitutional rights.
On June 14, 2001, the appellate court promulgated its assailed Decision denying the petition, thus:
WHEREFORE, premises considered, the petition is hereby DENIED DUE COURSE and DISMISSED. The Order, dated October 5,
1999 as well as the Order, dated December 3, 1999, are hereby AFFIRMED in toto.
SO ORDERED.[9]
Petitioner had argued before the Court of Appeals that respondent had no authority whatsoever to bring a suit in behalf of the
Corporation since there was no Board Resolution authorizing her to file the suit.
For her part, respondent Hao claimed that the suit was brought under the concept of a derivative suit. Respondent maintained that
when the directors or trustees refused to file a suit even when there was a demand from stockholders, a derivative suit was allowed.
The Court of Appeals held that the action was indeed a derivative suit, for it alleged that petitioner falsified documents pertaining
to projects of the corporation and made it appear that the petitioner was a stockholder and a director of the corporation. According to the
appellate court, the corporation was a necessary party to the petition filed with the RTC and even if private respondent filed the criminal
case, her act should not divest the Corporation of its right to be a party and present its own claim for damages.
Petitioner moved for reconsideration but it was denied in a Resolution dated November 20, 2001.
Hence, this petition alleging that the Court of Appeals committed reversible errors:
I. IN RULING THAT LYDIA HAOS FILING OF CRIMINAL CASE NO. 285721 WAS IN THE NATURE OF A
DERIVATIVE SUIT
II. IN UPHOLDING THE RULING OF JUDGE DAGUNA THAT SIENA REALTY WAS A PROPER PETITIONER
IN SCA NO. [99-94846]
17
 III. IN UPHOLDING JUDGE DAGUNAS DECISION ALLOWING LYDIA HAOS COUNSEL TO CONTINUE AS
PRIVATE PROSECUTORS IN CRIMINAL CASE NO. 285721
IV. IN [OMITTING] TO CONSIDER AND RULE UPON THE ISSUE THAT JUDGE DAGUNA ACTED IN GRAVE
ABUSE OF DISCRETION IN NOT DISMISSING THE PETITION IN SCA NO. [99-94846] FOR BEING A SHAM
PLEADING.[10]
The pertinent issues in this petition are the following: (1) Is the criminal complaint in the nature of a derivative suit? (2) Is Siena
Realty Corporation a proper petitioner in SCA No. 99-94846? and (3) Should private prosecutors be allowed to actively participate in
the trial of Criminal Case No. 285721.
On the first issue, petitioner claims that the Court of Appeals erred when (1) it sustained the lower court in giving due course to
respondents petition in SCA No. 99-94846 despite the fact that the Corporation was not the private complainant in Criminal Case No.
285721, and (2) when it ruled that Criminal Case No. 285721 was in the nature of a derivative suit.
Petitioner avers that a derivative suit is by nature peculiar only to intra-corporate proceedings and cannot be made part of a
criminal action. He cites the case of Western Institute of Technology, Inc. v. Salas,[11] where the court said that an appeal on the civil
aspect of a criminal case cannot be treated as a derivative suit. Petitioner asserts that in this case, the civil aspect of a criminal case
cannot be treated as a derivative suit, considering that Siena Realty Corporation was not the private complainant.
Petitioner misapprehends our ruling in Western Institute. In that case, we said:
Here, however, the case is not a derivative suit but is merely an appeal on the civil aspect of Criminal Cases Nos. 37097 and 37098
filed with the RTC of Iloilo for estafa and falsification of public document. Among the basic requirements for a derivative suit to
prosper is that the minority shareholder who is suing for and on behalf of the corporation must allege in his complaint before the
proper forum that he is suing on a derivative cause of action on behalf of the corporation and all other shareholders similarly situated
who wish to join. . . .This was not complied with by the petitioners either in their complaint before the court a quo nor in the instant
petition which, in part, merely states that this is a petition for review on certiorari on pure questions of law to set aside a portion of the
RTC decision in Criminal Cases Nos. 37097 and 37098 since the trial courts judgment of acquittal failed to impose civil liability
against the private respondents. By no amount of equity considerations, if at all deserved, can a mere appeal on the civil aspect of a
criminal case be treated as a derivative suit.[12]
Moreover, in Western Institute, we said that a mere appeal in the civil aspect cannot be treated as a derivative suit because the
appeal lacked the basic requirement that it must be alleged in the complaint that the shareholder is suing on a derivative cause of action
for and in behalf of the corporation and other shareholders who wish to join.
Under Section 36[13] of the Corporation Code, read in relation to Section 23,[14]where a corporation is an injured party, its power
to sue is lodged with its board of directors or trustees.[15] An individual stockholder is permitted to institute a derivative suit on behalf of
the corporation wherein he holds stocks in order to protect or vindicate corporate rights, whenever the officials of the corporation refuse
to sue, or are the ones to be sued, or hold the control of the corporation. In such actions, the suing stockholder is regarded as a nominal
party, with the corporation as the real party in interest. [16]
A derivative action is a suit by a shareholder to enforce a corporate cause of action. The corporation is a necessary party to the
suit. And the relief which is granted is a judgment against a third person in favor of the corporation. Similarly, if a corporation has a
defense to an action against it and is not asserting it, a stockholder may intervene and defend on behalf of the corporation.[17]
Under the Revised Penal Code, every person criminally liable for a felony is also civilly liable.[18] When a criminal action is
instituted, the civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal
action, unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to
the criminal action.[19]
In Criminal Case No. 285721, the complaint was instituted by respondent against petitioner for falsifying corporate documents
whose subject concerns corporate projects of Siena Realty Corporation. Clearly, Siena Realty Corporation is an offended party. Hence,
Siena Realty Corporation has a cause of action. And the civil case for the corporate cause of action is deemed instituted in the criminal
action.
However, the board of directors of the corporation in this case did not institute the action against petitioner. Private respondent
was the one who instituted the action. Private respondent asserts that she filed a derivative suit in behalf of the corporation. This assertion
is inaccurate. Not every suit filed in behalf of the corporation is a derivative suit. For a derivative suit to prosper, it is required that the
minority stockholder suing for and on behalf of the corporation must allege in his complaint that he is suing on a derivative cause of
action on behalf of the corporation and all other stockholders similarly situated who may wish to join him in the suit. [20] It is a
condition sine qua non that the corporation be impleaded as a party because not only is the corporation an indispensable party, but it is
also the present rule that it must be served with process. The judgment must be made binding upon the corporation in order that the
corporation may get the benefit of the suit and may not bring subsequent suit against the same defendants for the same cause of action.
In other words, the corporation must be joined as party because it is its cause of action that is being litigated and because judgment must
be a res adjudicata against it.[21]
In the criminal complaint filed by herein respondent, nowhere is it stated that she is filing the same in behalf and for the benefit
of the corporation. Thus, the criminal complaint including the civil aspect thereof could not be deemed in the nature of a derivative suit.
We turn now to the second issue, is the corporation a proper party in the petition for certiorari under Rule 65 before the RTC?
Note that the case was titled Lydia C. Hao, in her own behalf and for the benefit of Siena Realty Corporation v. Francis Chua, and the
Honorable Hipolito dela Vega, Presiding Judge, Branch 22, Metropolitan Trial Court of Manila. Petitioner before us now claims that
the corporation is not a private complainant in Criminal Case No. 285721, and thus cannot be included as appellant in SCA No. 99-
94846.
Petitioner invokes the case of Ciudad Real & Devt. Corporation v. Court of Appeals.[22] In Ciudad Real, it was ruled that the
Court of Appeals committed grave abuse of discretion when it upheld the standing of Magdiwang Realty Corporation as a party to the
petition for certiorari, even though it was not a party-in-interest in the civil case before the lower court.
In the present case, respondent claims that the complaint was filed by her not only in her personal capacity, but likewise for the
benefit of the corporation. Additionally, she avers that she has exhausted all remedies available to her before she instituted the case, not
only to claim damages for herself but also to recover the damages caused to the company.
Under Rule 65 of the Rules of Civil Procedure,[23] when a trial court commits a grave abuse of discretion amounting to lack or
excess of jurisdiction, the person aggrieved can file a special civil action for certiorari. The aggrieved parties in such a case are the State
and the private offended party or complainant.[24]
In a string of cases, we consistently ruled that only a party-in-interest or those aggrieved may file certiorari cases. It is settled that
the offended parties in criminal cases have sufficient interest and personality as person(s) aggrieved to file special civil action of
prohibition and certiorari.[25]
In Ciudad Real, cited by petitioner, we held that the appellate court committed grave abuse of discretion when it sanctioned the
standing of a corporation to join said petition for certiorari, despite the finality of the trial courts denial of its Motion for Intervention
and the subsequent Motion to Substitute and/or Join as Party/Plaintiff.
Note, however, that in Pastor, Jr. v. Court of Appeals[26] we held that if aggrieved, even a non-party may institute a petition for
certiorari. In that case, petitioner was the holder in her own right of three mining claims and could file a petition for certiorari, the fastest
and most feasible remedy since she could not intervene in the probate of her father-in-laws estate.[27]
In the instant case, we find that the recourse of the complainant to the respondent Court of Appeals was proper. The petition was
brought in her own name and in behalf of the Corporation. Although, the corporation was not a complainant in the criminal action, the
subject of the falsification was the corporations project and the falsified documents were corporate documents. Therefore, the corporation
is a proper party in the petition for certiorari because the proceedings in the criminal case directly and adversely affected the corporation.
We turn now to the third issue. Did the Court of Appeals and the lower court err in allowing private prosecutors to actively
participate in the trial of Criminal Case No. 285721?
Petitioner cites the case of Tan, Jr. v. Gallardo,[28] holding that where from the nature of the offense or where the law defining
and punishing the offense charged does not provide for an indemnity, the offended party may not intervene in the prosecution of the
offense.
Petitioners contention lacks merit. Generally, the basis of civil liability arising from crime is the fundamental postulate that every
man criminally liable is also civilly liable. When a person commits a crime he offends two entities namely (1) the society in which he
lives in or the political entity called the State whose law he has violated; and (2) the individual member of the society whose person,
right, honor, chastity or property has been actually or directly injured or damaged by the same punishable act or omission. An act or
omission is felonious because it is punishable by law, it gives rise to civil liability not so much because it is a crime but because it caused
damage to another. Additionally, what gives rise to the civil liability is really the obligation and the moral duty of everyone to repair or
make whole the damage caused to another by reason of his own act or omission, whether done intentionally or negligently. The indemnity
which a person is sentenced to pay forms an integral part of the penalty imposed by law for the commission of the crime. [29] The civil
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action involves the civil liability arising from the offense charged which includes restitution, reparation of the damage caused, and
indemnification for consequential damages.[30]

Under the Rules, where the civil action for recovery of civil liability is instituted in the criminal action pursuant to Rule 111, the
offended party may intervene by counsel in the prosecution of the offense. [31] Rule 111(a) of the Rules of Criminal Procedure provides
that, [w]hen a criminal action is instituted, the civil action arising from the offense charged shall be deemed instituted with the criminal
action unless the offended party waives the civil action, reserves the right to institute it separately, or institutes the civil action prior to
the criminal action.

Private respondent did not waive the civil action, nor did she reserve the right to institute it separately, nor institute the civil action
for damages arising from the offense charged. Thus, we find that the private prosecutors can intervene in the trial of the criminal action.

Petitioner avers, however, that respondents testimony in the inferior court did not establish nor prove any damages personally
sustained by her as a result of petitioners alleged acts of falsification. Petitioner adds that since no personal damages were proven therein,
then the participation of her counsel as private prosecutors, who were supposed to pursue the civil aspect of a criminal case, is not
necessary and is without basis.

When the civil action is instituted with the criminal action, evidence should be taken of the damages claimed and the court should
determine who are the persons entitled to such indemnity. The civil liability arising from the crime may be determined in the criminal
proceedings if the offended party does not waive to have it adjudged or does not reserve the right to institute a separate civil action
against the defendant. Accordingly, if there is no waiver or reservation of civil liability, evidence should be allowed to establish the
extent of injuries suffered.[32]

In the case before us, there was neither a waiver nor a reservation made; nor did the offended party institute a separate civil action.
It follows that evidence should be allowed in the criminal proceedings to establish the civil liability arising from the offense committed,
and the private offended party has the right to intervene through the private prosecutors.

WHEREFORE, the instant petition is DENIED. The Decision, dated June 14, 2001, and the Resolution, dated November 20,
2001, of the Court of Appeals in CA-G.R. SP No. 57070, affirming the Order, dated October 5, 1999, of the Regional Trial Court (RTC)
of Manila, Branch 19, are AFFIRMED. Accordingly, the private prosecutors are hereby allowed to intervene in behalf of private
respondent Lydia Hao in the prosecution of the civil aspect of Criminal Case No. 285721 before Branch 22, of Metropolitan Trial Court
(MeTC) of Manila. Costs against petitioner.

SO ORDERED.

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