[NO WORK NO PAY] Whether or not the employees were entitled to compensation during the time

LAO CONSTRUCTION V NLRC construction activities were suspended. NO. The cessation of construction
September 5, 1997 | BELLOSILLO, J. activities at the end of every project is a foreseeable suspension of work.
● Of course, no compensation can be demanded from the employer because
Petitioner/s: TOMAS LAO CONSTRUCTION, LVM CONSTRUCTION the stoppage of operations at the end of a project and before the start of a
CORPORATION, THOMAS and JAMES DEVELOPERS (PHIL.), INC. new one is regular and expected by both parties to the labor relations.
Respondents: NATIONAL LABOR RELATIONS COMMISSION, MARIO O. ● However, it should be noted that similar to the case of regular seasonal
LABENDIA, SR., ROBERTO LABENDIA, NARCISO ADAN, FLORENCIO GOMEZ, employees, the employment relation is not severed by merely being
ERNESTO BAGATSOLON, SALVADOR BABON, PATERNO BISNAR, CIPRIANO suspended. The employees are, strictly speaking, not separated from
BERNALES, ANGEL MABULAY, SR., LEO SURIGAO, and ROQUE MORILLO services but merely on leave of absence without pay until they are
reemployed.
Doctrine: The cessation of construction activities at the end of a project is a
foreseeable suspension of work. No compensation can be demanded from the Dispositive
employer because the stoppage of operations at the end of a project and before the WHEREFORE, the petition is DENIED and the decision of the National Labor
start of a new one is regular and to be expected by both parties to the labor relations. Relations Commission dated 05 August 1994 is AFFIRMED. Petitioners are ordered
to reinstate private respondents to their former positions without loss of seniority
Facts: rights and other privileges with full back wages, inclusive of allowances, computed
● Private respondents were employees of Tomas Lao Construction, LVM from the time compensation was withheld up to the time of actual reinstatement. In
Construction, and Thomas & James Developers Phil Inc., collectively a the event that reinstatement is no longer feasible, petitioners are directed to pay
business group under the Lao family. private respondents separation pay equivalent to one month salary for every year of
● They were dismissed after they refused to sign a new contract referring to service, a fraction of at least six (6) months being considered one (1) year in the
them as project employees, even after they were considered as regular computation thereof, and full back wages computed from the time compensation was
employees for the longest time. According to the private respondents, they withheld until the finality of this decision. All other claims of the parties are
would be hired and re-hired by the business group on a per project basis. DISMISSED for lack of merit. Costs against petitioners.
● Under joint venture agreements entered into among the three companies,
the private respondents would undertake their projects either simultaneously SO ORDERED.
or successively so that, whenever necessary, they would lease tools and
equipment to one another. Each one would also allow the utilization of their
employees by the other two (2).
● With this arrangement, workers were transferred whenever necessary to on-
going projects of the same company or of the others, or were rehired after
the completion of the project or project phase to which they were assigned.
● Because of the private respondents’ refusal to sign the new contract, the
petitioners thus withheld their salaries and when they still refused to sign,
they were viewed as uninterested with regard to keeping their positions.
They were eventually terminated
Issues/Ruling:
Whether or not the employees are considered as regular employees and were
thus terminated illegally – YES. While they were indeed hired on a per project
basis, the fact remains that the petitioners were hired and re-hired for seven years,
over a long span of time, making them regular employees.

● “Thus, where the employment of project employees is extended long after

the supposed project has been finished, the employees are removed from
the scope of project employees and are considered regular employees.”
● While they were free to seek other employment while not working on a
project, the continuous rehiring prevents them from doing so. If indeed, the
intention was to suspend them after the project, they should have submitted
reports of termination—but they didn’t because workers would be rehired by
the other company under the Lao Group.