Labrel Cases 64-70

64. G.R. No.
119523 October 10, 1997
ISABELO VIOLETA and JOVITO BALTAZAR, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, Fifth Division, and DASMARIÑAS INDUSTRIAL AND STEEL
WORKS CORPORATION, respondents.
REGALADO, J.:
Petitioners Isabelo Violeta and Jovito Baltazar were former employees of private respondent Dasmariñas
Industrial and Steelworks Corporation (DISC). Their records of service and employment, insofar as the same
are material to this case, are not in dispute.
Petitioner Violeta worked in Construction and Development Corporation of the Philippines (CDCP), a sister
corporation of private respondent, at its project in CDCP Mines, Basay, Negros Oriental from December 15,
1980 up to February 15, 1981. Private respondent then hired him as Erector II at the former's project for
Philphos in Isabel, Leyte on November 10, 1982 until the termination of the project on December 3, 1984. On
January 21, 1985, he was reassigned as Erector II for Five Stand TCM Project, with vacation and sick leaves,
and was designated as a regular project employee at private respondent's project for National Steel
Corporation (NSC) in Iligan City. After receiving a salary adjustment, he was again hired on June 6, 1989 as
Handyman for the civil works of a construction project for NSC. 1 On February 10, 1992, he was appointed for
project employment, again as Handyman, to NSC ETL #3 Civil Works by private respondent. Due to the
completion of the particular item of work he was assigned to, private respondent terminated the services of
petitioner Violeta on March 15, 1992.2
Petitioner Baltazar started in the employ of CDCP on June 23, 1980. He was hired by private respondent as
Lead Carpenter for project Agua VII on October 1, 1981. Like petitioner Violeta, he was transferred from one
project to another as a regular project employee. 3 On November 28, 1991, he was hired as Leadman II in ETL
#3 Civil Works by private respondent in its project for NSC, but he was separated from such employment on
December 20, 1991 as a result of the completion of said item of work. 4
Upon their separation, petitioners executed a quitclaim wherein they declared that they have no claim against
private respondent and supposedly discharged private respondent from any liability arising from their
employment. 5
Contending that they are already regular employees who cannot be dismissed on the ground of completion of
the particular project where they are engaged, petitioners filed two separate complaints for illegal dismissal
against private respondent, with a prayer for reinstatement and back wages plus damages.
Private respondent admitted that it is engaged in the development and construction of infrastructure projects
and maintained that Violeta was hired on June 6, 1989 to March 15, 1992 as Handyman while Baltazar was
employed on June 6, 1989 to December 20, 1991 as Leadman II. 6 It argued that both are project employees
based on their declaration in their Appointments for Project Employment that they are employed only for the
period and specific works stated in their respective appointments, in addition to their admission that they are
project employees who are subject to the provisions of Policy Instruction No. 20. 7
Labor Arbiter Guardson A. Siao dismissed the claims of petitioners for lack of merit but ordered private
respondent to grant them separation pay. 8 The labor arbiter concluded that petitioners are project employees
based on their admission that they are regular project employees. Thus, their employment was deemed
coterminous with the project for which their employer engaged them. Their separation was declared valid and
their claims for reinstatement and back wages were denied. The award of separation pay was based on the
findings of the labor arbiter that it is the policy of private respondent to pay employees who have rendered at
least one year of continuous service.
Petitioners and private respondent duly appealed the ruling of the labor arbiter to respondent NLRC.
Finding petitioners to be non-project employees in its resolution dated August 17, 1994, 9 the Fifth Division of
the NLRC reversed the decision of the labor arbiter and declared petitioners' dismissal as illegal. Private
respondent company was thereafter ordered to reinstate petitioners to their former positions without loss of
seniority rights and to pay them back wages operative from the date of petitioners' dismissal. In the event that
reinstatement can no longer be made due to any lawful supervening event, the labor tribunal directed private
respondent to further give petitioners the corresponding separation pay. Private respondent was also required
to pay attorney's fees to petitioners.
According to the NLRC, although the appointment contracts of petitioners specified fixed terms or periods of
employment, the fact that they were hired and transferred from one project to another made both petitioners
non-project employees who cannot be terminated by reason alone of the completion of the project. They were
hired not only for one particular project but different projects, one after the other.
However, on November 15, 1994,10 the same division of the NLRC reversed itself upon motion of private
respondent and set aside its earlier resolution. Reportedly, a reexamination of the same evidence before it led
the labor court to conclude that the employment of petitioners in ETL #3 Civil Works was allegedly for a
specific or fixed period thus making petitioners project employees. This time, it held that since the termination
of petitioners' employment was due to the completion of the project, petitioners are therefore not entitled to
separation pay. It ruled that this would hold true even if petitioners were categorized as regular project
employees because their employment was not permanent but coterminous with the projects to which they
were assigned. No other substantial reason was given for the adjudicative turnabout.
In this petition for certiorari, petitioners contend that public respondent (NLRC) committed grave abuse of
discretion amounting to lack of jurisdiction when it granted the motion for reconsideration of private
respondents in its November 15, 1994 resolution. Such novatory resolution, petitioners contend, was not only
too abbreviated but actually disregarded applicable laws and jurisprudence governing the characterization of
employees in the construction industry.
We have held that the services of project employees are coterminous with the project and may be terminated
upon the end or completion of that project for which they were hired. Regular employees, in contrast, are
legally entitled to remain in the service of their employer until their services are terminated by one or another of
the recognized modes of termination of service under the Labor Code. 11
Foremost for our resolution then is the issue of whether petitioners are regular (non-project) employees or
project employees. Upon the resolution of this query rests the validity of petitioners' dismissal.
The source of the definition of a regular employee vis-a-vis a project employee is found in Article 280 of the
Labor Code which provides:
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.
(Emphases ours).
Article 280 was emplaced in our statute books to prevent the circumvention of the employee's right to be
secure in his tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent
with the concept of regular employment defined therein. 12 Where an employee has been engaged to perform
activities which are usually necessary or desirable in the usual business of the employer, such employee is
deemed a regular employee and is entitled to security of tenure notwithstanding the contrary provisions of his
contract of employment. 13
As Handyman and Erector II, respectively, petitioners' services are both necessary and vital to the operation of
the business of private respondent. This is not at all traversed, but is even confirmed by the fact that they were
continually and successively assigned to the different projects of private respondent and its sister company,
CDCP.
In order to properly characterize petitioners' employment, we now proceed to ascertain whether or not their
employment falls under the exceptions provided in Article 280 of the Code.
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. 14 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. 15
Based on the above criteria, we find petitioners to be regular employees of private respondent, and not project
employees as postulated by respondent NLRC. Petitioners' dismissal, therefore, could not be justified by the
completion of their items of work.
The predetermination of the duration or period of a project employment is important in resolving whether one
is a project employee or not. On this score, the term period has been defined to be "a length of
existence; duration. A point of time marking a termination as of a cause or an activity; an end, a limit, a bound;
conclusion; termination. A series of years, months or days in which something is completed. A time of definite
length or the period from one fixed date to another fixed date." 16
There is no debate that petitioners were hired for a specific project or undertaking. Their Appointments for
Project Employment clearly state that their employment is for NSC ETL #3 Civil Works. The fact of the
completion of said item of work is also undisputed. However, the records are barren of any definite period or
duration for the expiration of the assigned items of work of petitioners at the time of their engagement. An
examination of said appointments reveal that the completion or termination of the project for which petitioners
were hired was not determined at the start of their employment. There is no specific mention of the period or
duration when the project will be completed or terminated. In fact, the lines for "DATE OF COVERAGE" in the
appointments (referring to the particular items of work for which petitioners are engaged) are left blank.
While the word "co-terminus" was adopted in the appointments of petitioners, it cannot readily be concluded
that their employment with private respondent is for a definite duration, that is, until the completion of their
items of work, because there are other words used in the aforesaid appointments affecting their entitlement to
stay in their job. To be concrete, the pertinent terms of the Appointments For Project Employment of
petitioners are quoted below, thus:
Your herein Appointments will be co-terminus with the need of _________ as it will necessitate
personnel in such number and duration contingent upon the progress accomplishment from
time to time. The company shall determine the personnel and the number as work progresses.
An interpretation of the above provisions is important for the correct labeling of petitioners' employment with
private respondent. Propitiously, this Court has already been confronted with contracts of employment of the
same and exact tenor as above in De Jesus vs. Philippine National Construction Corp. and National Labor
Relations Commission, et al. 17 The contracts involved in said case also provided as follows:
Your herein Appointment Employment will be co-terminus with the need of Structures [of North
Luzon Expressway (Stage) II] as it will necessitate personnel in such number and duration
contingent upon the progress accomplishment from time to time. The company shall determine
the personnel and the number as the work progresses.
On such premises, the Court declared:
Without question, the petitioner, a carpenter, performs work "necessary, or desirable" in the
construction business, the corporation's field of activity. The fact however that he had been
involved in project works will not alter his status because the law requires "specific project or
undertaking the completion or termination of which has been determined at the time of
engagement" in order to make a project employee a true project employee. . . . we can not say
that the petitioner's engagement has been predetermined because the duration of the work is
"contingent upon the progress accomplishment" and secondly, the company, under the contract,
is free to "determine the personnel and the number as the work progresses." Clearly, the
employment is subject to no term but rather, a condition, that is, "progress accomplishment." It
can not therefore be said to be definite that will therefore exempt the respondent company from
the effects of Article 280.
Following the rule on precedents, we once again hold that the respective employments of the present
petitioners is not subject to a term but rather to a condition, that is, "progress accomplishment." As we have
stated in De Jesus, it cannot be said that their employment had been pre-determined because, firstly, the
duration of their work is "contingent upon the progress accomplishment" and, secondly, the contract gives
private respondent the liberty to "determine the personnel and the number as the work progresses." It is
ineluctably not definite so as to exempt private respondent from the strictures and effects of Article 280.
To add our own observation, the appointments of petitioners herein were not coterminous with NSC ETL #3
Civil Works but with the "need" for such particular items of work as were assigned to them, as distinguished
from the completion of the project.
With such ambiguous and obscure words and conditions, petitioners' employment was not co-existent with the
duration of their particular work assignments because their employer could, at any stage of such work,
determine whether their services were needed or not. Their services could then be terminated even before the
completion of the phase of work assigned to them.
We find this explication necessary and in accord with the principle that in controversies between a laborer and
his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writings
should be resolved in the former's favor. 18
To be exempted from the presumption of regularity of employment, therefore, the agreement between a
project employee and his employer must strictly conform with the requirements and conditions provided in
Article 280. It is not enough that an employee is hired for a specific project or phase of work. There must also
be a determination of or a clear agreement on the completion or termination of the project at the time the
employee is engaged if the objective of Article 280 is to be achieved. Since this second requirement was not
met in petitioners' case, they should be considered as regular employees despite their admissions and
declarations that they are project employees made under circumstances unclear to us.
Parenthetically, it is relevant to observe that the similarities in the stipulations of the employment/appointment
contracts can be explained by the indirect relationship of the Philippine National Construction Corporation
(PNCC) and private respondent. CDCP was the predecessor of PNCC which, in turn, is an existing sister
company of private respondent. Apparently, private respondent ignored the mistake committed by its said
sister company. Also, if only the NLRC had thoroughly read the De Jesus decision, it would have discovered
that the PNCC also raised as a defense the admission of therein petitioner De Jesus that he was a project
employee, but to no avail.
There is another reason why we should rule in favor of petitioners. Nowhere in the records is there any showing
that private respondent reported the completion of its projects and the dismissal of petitioners in its finished
projects to the nearest Public Employment Office in compliance with Policy Instruction No. 20 of then Labor
Secretary Bias F. Ople.
Jurisprudence abounds with the consistent rule that the failure of an employer to report to the nearest Public
Employment Office the termination of its workers' services every time a project or a phase thereof is
completed indicates that said workers are not project employees. 19 In the case at bar, only the last and final
termination of petitioners was reported to the aforementioned labor office.
Private respondent should have filed as many reports of termination as there were construction projects
actually finished if petitioners were indeed project employees, considering that petitioners were hired and
again rehired for various projects or the phases of work therein. Its failure to submit reports of termination
cannot but sufficiently convince us further that petitioners are truly regular employees. Just as important, the
fact that petitioners had rendered more than one year of service at the time of their dismissal overturns private
respondent's allegations that petitioners were hired for a specific or a fixed undertaking for a limited period of
time. 20
Even if we disregard the stints of petitioners with CDCP, it cannot be disclaimed that they have rendered long
years of service in private respondent's business affairs. Beginning his service in 1982, petitioner Violeta
served in the employ of private respondent up to 1992. In the case of petitioner Baltazar, he worked for private
respondent from 1981 to 1991. Private respondent repeatedly appointed petitioners to new projects after the
completion of every project or item of work in which they were previously employed, each over a span of about
10 years.
Public respondent contends that the gaps in the employment of petitioners, consisting of the periods in
between the completion of one project and the engagement of petitioners in the next, show that they could not
have been regular employees under the control of private respondent, and that petitioners could have applied
for or accepted employment from other employers during those periods. This is puerile and speculative.
In the first place, Article 280 of the Labor Code contemplates both continuous and broken services. In the
second place, there is absolutely no evidence of petitioners having applied for or accepted such other or
outside employment during the brief interregna in the continuity of their work with private respondent. Their
undertaking in the "Employment Terms and Conditions" of their service to private respondent bound them "to
work in such place of work or project as DISC may assign or transfer" them, with the further agreement that
they would so "work during rest day, holidays, night time and night shift or during emergencies. 21
These are self-evident refutations of private respondent's theory and further bolster petitioners' position that
they were not mere employees engaged for a single or particular project. They were thus removed from the
scope of project employment and considered as regular employees since their employment as so-called
project employees was extended long after the termination of different projects. 22
The fact that petitioners signed quitclaims will not bar them from pursuing their claims against private
respondent because quitclaims executed by laborers are frowned upon as contrary to public policy, and are
ineffective to bar claims for the full measure of the workers' legal rights. 23 The so-called quitclaims signed by
petitioners were actually pro forma provisions printed in the clearance certificate they had to get from private
respondent. These were not in the nature of a compromise but a compulsory general release required from
them, for which no consideration was either given or even stated.
In answer to private respondent's reliance on Department of Labor and Employment (DOLE) Order No. 19,
Series of 1993, which took effect on April 1, 1993, we have ruled in Samson vs. National Labor Relations
Commission, et al. 24 that said administrative order does not have retroactive effect. Since the termination of
petitioners' services and the filing of their complaints took place long before the effectivity of the said
regulation, it cannot be applied in favor of private respondent.
Besides, as expounded earlier, contrary to private respondent's insistence, the following badges of project
employment are lacking in this particular case, viz.: (1) the duration of the specific/identified undertaking for
which the worker is engaged is reasonably determinable, and (2) such duration, as well as the specific
work/service to be performed, is defined in an employment agreement and made clear to the employee at the
time of hiring. Hence, even assuming for the moment that DOLE Order No. 19 is effectual in the case at bar,
private respondent cannot successfully invoke the Order in its favor because the absence of the above indicia
persuades us all the more that petitioners are really regular employees of private respondent.
WHEREFORE, the instant petition for certiorari is GRANTED. The challenged resolution of the Fifth Division of
respondent National Labor Relations Commission dated November 15, 1994 in NLRC CA No. M-001233 is
REVERSED and SET ASIDE, and its earlier resolution therein dated August 17, 1994 is hereby REINSTATED.
SO ORDERED.
65. G.R. No. 125837 October 6, 2004

REYNALDO CANO CHUA, doing business under the name & style PRIME MOVER CONSTRUCTION
DEVELOPMENT, petitioner,
vs.
COURT OF APPEALS, SOCIAL SECURITY COMMISSION, SOCIAL SECURITY SYSTEM, ANDRES PAGUIO,
PABLO CANALE, RUEL PANGAN, AURELIO PAGUIO, ROLANDO TRINIDAD, ROMEO TAPANG and CARLOS
MALIWAT, respondents.
DECISION
TINGA, J.:
This is a petition for review of the Decision1 of the Court of Appeals in CA-G.R. CV No. 38269 dated 06 March
1996, and its Resolution dated 30 July 1996 denying petitioner’s Motion for Reconsideration,2 affirming the
Order of the Social Security Commission (SSC) dated 1 February 1995 3 which held that private respondents
were regular employees of the petitioner and ordered petitioner to pay the Social Security System (SSS) for its
unpaid contributions, as well as penalty for the delayed remittance thereof.
On 20 August 1985, private respondents Andres Paguio, Pablo Canale, Ruel Pangan, Aurelio Paguio, Rolando
Trinidad, Romeo Tapang and Carlos Maliwat (hereinafter referred to as respondents) filed a Petition4 with the
SSC for SSS coverage and contributions against petitioner Reynaldo Chua, owner of Prime Mover Construction
Development, claiming that they were all regular employees of the petitioner in his construction business. 5
Private respondents claimed that they were assigned by petitioner in his various construction projects
continuously in the following capacity, since the period indicated, and with the corresponding basic
salaries,6 to wit:
₱
Andres Paguio Carpenter 1977
42/day
Pablo Canale Mason 1977 42/day
Ruel Pangan Mason 1979 39/day
Fine
Aurelio Paguio 1979 42/day
grading
Fine
Romeo Tapang 1979 42/day
grading
Rolando 1983
Carpenter 39/day
Trinidad (Jan.)
Carlos Maliwat Mason 1977 42/day
Private respondents alleged that petitioner dismissed all of them without justifiable grounds and without
notice to them and to the then Ministry of Labor and Employment. They further alleged that petitioner did not
report them to the SSS for compulsory coverage in flagrant violation of the Social Security Act. 7
In his Answer,8 petitioner claimed that private respondents had no cause of action against him, and assuming
there was any, the same was barred by prescription and laches. In addition, he claimed that private
respondents were not regular employees, but project employees whose work had been fixed for a specific
project or undertaking the completion of which was determined at the time of their engagement. This being the
case, he concluded that said employees were not entitled to coverage under the Social Security Act. 9
Meanwhile, the SSS filed a Petition in Intervention10 alleging that it has an interest in the petition filed by private
respondents as it is charged with the implementation and enforcement of the provisions of the Social Security
Act. The SSS stated that it is the mandatory obligation of every employer to report its employees to the SSS for
coverage and to remit the required contribution, including the penalty imposed for late premium remittances.
On 01 February 1995, the SSC issued its Order11 which ruled in favor of private respondents. The SSC, relying
on NLRC Case No. RAB-III-8-2373-85,12 declared private respondents to be petitioner’s regular employees. 13 It
ordered petitioner to pay the SSS the unpaid SS/EC and Medicare contributions plus penalty for the delayed
remittance thereof, without prejudice to any other penalties which may have accrued. 14 The SSC denied
the Motion for Reconsideration15 of petitioner for lack of merit. 16
Petitioner elevated the matter to the Court of Appeals via a Petition for Review.17 He claimed that private
respondents were project employees, whose periods of employment were terminated upon completion of the
project. Thus, he claimed, no employer-employee relation existed between the parties. 18 There being no
employer-employee relationship, private respondents are not entitled to coverage under the Social Security
Act.19 In addition, petitioner claimed that private respondents’ length of service did not change their status
from project to regular employees.20
Moreover, granting that private respondents were entitled to coverage under the Act, petitioner claimed that
the SSC erred in imposing penalties since his failure to include private respondents under SSS coverage was
neither willful nor deliberate, but due to the honest belief that project employees are not regular
employees.21 Likewise, he claimed that the SSC erred in ordering payment of contributions and penalties even
for long periods between projects when private respondents were not working. 22
Petitioner also questioned the failure to apply the rules on prescription of actions and of laches, claiming that
the case, being one for the injury to the rights of the private respondents, should have been filed within four (4)
years from the time their cause of action accrued, or from the time they were hired as project employees. He
added that private respondents "went into a long swoon, folded their arms and closed their eyes" 23 and filed
their claim only in 1985, or six (6) years or eight (8) years after they were taken in by petitioner. 24
In resolving the petition, the Court of Appeals synthesized the issues in the petition, to wit: (1) whether private
respondents were regular employees of petitioner, and whether their causes of action as such are barred by
prescription or laches; (2) if so, whether petitioner is now liable to pay the SSS contributions and penalties
during the period of employment.25
The Court of Appeals, citing Article 280 of the Labor Code, 26 declared that private respondents were all regular
employees of the petitioner in relation to certain activities since they all worked either as masons, carpenters
and fine graders in petitioner’s various construction projects for at least one year, and that their work was
necessary and desirable to petitioner’s business which involved the construction of roads and bridges. 27 It
cited the case of Mehitabel Furniture Company, Inc. v. NLRC,28 particularly the ruling therein which states:
By petitioner’s own admission, the private respondents have been hired to work on certain special
orders that as a matter of business policy it cannot decline. These projects are necessary or desirable
in its usual business or trade, otherwise they would not have accepted …. Significantly, such special
orders are not really seasonal but more or less regular, requiring the virtually continuous services of the
"temporary workers." The NLRC also correctly observed that "if we were to accept respondent’s theory,
it would have no regular workers because all of its orders would be special undertakings or projects."
The petitioner could then hire all its workers on a contract basis only and prevent them from attaining
permanent status….
Furthermore, the NLRC has determined that the private respondents have worked for more than one
year in the so-called "special projects" of the petitioner and so fall under the second condition specified
in the above-quoted provision (Article 280, Labor Code). 29
The Court of Appeals rejected the claim of prescription, stating that the filing of private respondents’ claims
was well within the twenty (20)-year period provided by the Social Security Act. 30 It found that the principle of
laches could not also apply to the instant case since delay could not be attributed to private respondents,
having filed the case within the prescriptive period, and that there was no evidence that petitioner lacked
knowledge that private respondents would assert their rights. 31
Petitioner filed a Motion for Reconsideration,32 claiming that the Court of Appeals overlooked (1) the doctrine
that length of service of a project employee is not the controlling test of employment tenure, and (2)
petitioner’s failure to place private respondents under SSS coverage was in good faith. The motion was denied
for lack of merit.33
In the present Petition for Review, petitioner again insists that private respondents were not regular, but
project, employees and thus not subject to SSS coverage. In addition, petitioner claims that assuming private
respondents were subject to SSS coverage, their petition was barred by prescription and laches. Moreover,
petitioner invokes the defense of good faith, or his honest belief that project employees are not regular
employees under Article 280 of the Labor Code.lawphil.net
Petitioner’s arguments are mere reiterations of his arguments submitted before the SSC and the Court of
Appeals. More importantly, petitioner wants this Court to review factual questions already passed upon by the
SSC and the Court of Appeals which are not cognizable by a petition for review under Rule 45. Well-entrenched
is the rule that the Supreme Court’s jurisdiction in a petition for review is limited to reviewing or revising errors
of law allegedly committed by the appellate court, the findings of fact being generally conclusive on the Court
and it is not for the Court to weigh evidence all over again. 34
Stripped of the lengthy, if not repetitive, disquisition of the private parties in the case, and also of the public
respondents, on the nature of private respondents’ employment, the controversy boils down to one issue: the
entitlement of private respondents to compulsory SSS coverage.
The Social Security Act was enacted pursuant to the policy of the government "to develop, establish gradually
and perfect a social security system which shall be suitable to the needs of the laborers throughout the
Philippines, and shall provide protection against the hazards of disability, sickness, old age and death." 35 It
provides for compulsory coverage of all employees not over sixty years of age and their employers. 36
Well-settled is the rule that the mandatory coverage of Republic Act No. 1161, as amended, is premised on the
existence of an employer-employee relationship, the essential elements of which are: (a) selection and
engagement of the employee; (b) payment of wages; (c) the power of dismissal; and (d) the power of control
with regard to the means and methods by which the work is to be accomplished, with the power of control
being the most determinative factor.37
There is no dispute that private respondents were employees of petitioner. Petitioner himself admitted that
they worked in his construction projects, 38 although the period of their employment was allegedly co-terminus
with their phase of work.39 Even without such admission from petitioner, the existence of an employer-
employee relationship between the parties can easily be determined by the application of the "control
test,"40 the elements of which are enumerated above. It is clear that private respondents are employees of
petitioner, the latter having control over the results of the work done, as well as the means and methods by
which the same were accomplished. Suffice it to say that regardless of the nature of their employment,
whether it is regular or project, private respondents are subject of the compulsory coverage under the SSS Law,
their employment not falling under the exceptions provided by the law. 41 This rule is in accord with the Court’s
ruling in Luzon Stevedoring Corp. v. SSS42 to the effect that all employees, regardless of tenure, would qualify
for compulsory membership in the SSS, except those classes of employees contemplated in Section 8(j) of the
Social Security Act.43
This Court also finds no reason to deviate from the finding of the Court of Appeals regarding the nature of
employment of private respondents. Despite the insistence of petitioner that they were project employees, the
facts show that as masons, carpenters and fine graders in petitioner’s various construction projects, they
performed work which was usually necessary and desirable to petitioner’s business which involves
construction of roads and bridges. In Violeta v. NLRC,44 this Court ruled that to be exempted from the
presumption of regularity of employment, the agreement between a project employee and his employer must
strictly conform to the requirements and conditions under Article 280 of the Labor Code. It is not enough that
an employee is hired for a specific project or phase of work. There must also be a determination of, or a clear
agreement on, the completion or termination of the project at the time the employee was engaged if the
objectives of Article 280 are to be achieved. 45 This second requirement was not met in this case.
Moreover, while it may be true that private respondents were initially hired for specific projects or undertakings,
the repeated re-hiring and continuing need for their services over a long span of time—the shortest being two
years and the longest being eight—have undeniably made them regular employees. 46 This Court has held that
an employment ceases to be co-terminus with specific projects when the employee is continuously rehired due
to the demands of the employer’s business and re-engaged for many more projects without interruption. 47 The
Court likewise takes note of the fact that, as cited by the SSC, even the National Labor Relations Commission
in a labor case involving the same parties, found that private respondents were regular employees of the
petitioner.48
Another cogent factor militates against the allegations of the petitioner. In the proceedings before the SSC and
the Court of Appeals, petitioner was unable to show that private respondents were appraised of the project
nature of their employment, the specific projects themselves or any phase thereof undertaken by petitioner and
for which private respondents were hired. He failed to show any document such as private respondents’
employment contracts and employment records that would indicate the dates of hiring and termination in
relation to the particular construction project or phases in which they were employed. 49 Moreover, it is peculiar
that petitioner did not show proof that he submitted reports of termination after the completion of his
construction projects, considering that he alleges that private respondents were hired and rehired for various
projects or phases of work therein.
Anent the issue of prescription, this Court rules that private respondents’ right to file their claim had not yet
prescribed at the time of the filing of their petition, considering that a mere eight (8) years had passed from the
time delinquency was discovered or the proper assessment was made. Republic Act No. 1161, as amended,
prescribes a period of twenty (20) years, from the time the delinquency is known or assessment is made by the
SSS, within which to file a claim for non-remittance against employers. 50
Likewise, this Court is in full accord with the findings of the Court of Appeals that private respondents are not
guilty of laches. The principle of laches or "stale demands" ordains that the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by exercising due diligence could or should
have been done earlier, or the negligence or omission to assert a right within a reasonable time, warrants a
presumption that the party entitled to assert it either has abandoned it or declined to assert it. 51 In the instant
case, this Court finds no proof that private respondents had failed or neglected to assert their right, considering
that they filed their claim within the period prescribed by law.1avvphi1.net
This Court finds no merit in petitioner’s protestations of good faith. In United Christian Missionary Society v.
Social Security Commission,52 this Court ruled that good faith or bad faith is irrelevant for purposes of
assessment and collection of the penalty for delayed remittance of premiums, since the law makes no
distinction between an employer who professes good reasons for delaying the remittance of premiums and
another who deliberately disregards the legal duty imposed upon him to make such remittance. 53 For the same
reasons, petitioner cannot now invoke the defense of good faith.
WHEREFORE, the Petition is DENIED. The Decision and Resolution of the Court of Appeals promulgated on 6

March 1996 and 30 July 1996 respectively, are AFFIRMED. Costs against petitioner.
SO ORDERED.
66. G.R. No. 82973 September 15, 1989
MARIO CARTAGENAS, JESUS N. MIRABALLES, VICTOR C. MONSOD and VICENTE BARROA, petitioners,

vs.
ROMAGO ELECTRIC COMPANY, INC., NATIONAL LABOR RELATIONS COMMISSION (Fifth
Division), respondents.
Isidro G. Pasana for petitioners.
Constantino B. de Jesus & Associates for private respondent.
GRINO-AQUIÑO, J.:
he issue in this case is whether the petitioners are project employees of the private respondent Romago
Electric Company, Inc., as found by the National Labor Relations Commission, or regular employees as found
by the Labor Arbiter.
The facts are recited in the decision of the NLRC as follows:
Respondent Romago is a general contractor engaged in contracting and sub-contracting of

specific building construction projects or undertaking such as electrical, mechanical and civil
engineering aspects in the repair of buildings and from other kindred services.
Individual complainants are employed by the respondent in connection with particular

construction projects and they are as follows:
1. Jesus N. Miraballes Project Assigned Period Covered
L. Towers 4/23/79-2/26/80
Nat'l Bookstore 2/26/80-8/28/80

PNRC-MHQ Bldg. 8/29/80-9/09/80
A. Payumo's Res. 9/10/80
State Center 3/05/81-7/13/81
FEBTC Bldg. 7/14/81-9/21/81
SMC Complex 9/22/81-9/10/84
PNB Finance Complex 9/11/84-7/12/86
(Annexes 1 to 25, respondent's Position Paper)
2. Victor C. Monsod
Project Assigned Period Covered
MMRH Project 4/13/76-2/02/80
Manila Hotel 2/03/80-7/19/81
PNB Project 7/20/81-7/16/84
Manila Hotel 7/17/84-7/02/84
PNB Finance Center 10/3/84-7/12/86
(Annexes 30 to 41, Ibid)
3. Vicente Barroa
SMC Hoc. Project 7/5/82-1/21/85
4. Mario Cartagenas
Effective July 12,1986, individual complainants and Lawrence Deguit were temporarily laid-off
by virtue of a memorandum issued by the respondent. In said memorandum they were also
informed that a meeting regarding the resumption of operation will be held on July 16, 1986 and
that they will be notified as to when they will resume work.
On July 28, 1986, complainants filed the instant case for illegal dismissal but before the
respondent could receive a copy of the complaint and the notification and summons issued by
the NLRC National Capital Region (actually received only on August 22, 1986, page 4, records)
individual complainants re-applied with the respondent and were assigned to work with its
project at Robinson-EDSA, specifically on the following dates, to wit:
1. Mirabelles and Monsod August 2/86
2. Barroa August 11/86
3. Cartagenas August 4/86
(Annexes 26 to 29-B; '39-4l'; 48 to 51 -B; '55 to 58-A', Ibid)
In hiring the herein complainants to be assigned to a particular project they have to fill up an
employment application form and are subjected to a pre-hiring examination. If evaluated to be
qualified they sign at the end portion of their employment application form that:
AGREEMENT
I hereby agree to the foregoing conditions and accept my employment for a fixed period and
from the above mentioned Project/Assignment only.
The conditions of employment to which the complainant agreed are mentioned in the right
upper portion of the same page of said application form, an example of which reads:
Assigned to FEBTC G.P. FORMOSO

Project
Position Electrician
Effectivity 7-14-81
Salary P18.50/day & allowance
Conditions Hired for above project

only
Approved: Signed
Personnel Manager
7/14/81
Date
(Employment Application Form of MIRABALLES JESUS NIEVA dated July 14,1981, Annex 16; 16-
A and 16-B, Ibid)
Thereafter the hired employee is given by the respondent an assignment slip, an example of
which reads:
ASSIGNMENT SLIP
DATE: July 14, 1981
Engr. C.A. Castro
Project In-Charge
FEFTC
Name of Project
The bearer, Mr. Jesus N. Miraballes will work under you as electrician effective 14 July 81. His
employment will terminate upon completion/stoppage of the project or terminated earlier for
cause.
Signed
GUDIOSO PLATA
Chief Engineer
CONFORME:
SGD. JESUS N. MIRABALLES
(Assignment slip of Jesus N. Miraballes, Annex 17, Ibid.)
xxx xxx xxx
... Respondent introduced documentary exhibits that the complainant have invariably been
issued appointment from project to projects and were issued notice of temporary lay-off when
the PNB Finance Center project was suspended due to lack of funds and that when work was
available particularly respondent's project at Robinson-EDSA they were rehired and assigned to
this project. (pp. 16-19; 21-22, Rollo.)
The NLRC held that the complainants were project employees because their appointments were "co-terminus
with the phase or item of work assigned to them in said project," It held further:
The fact that the complainants worked for the respondent under different project employment
contracts for so many years could not be made a basis to consider them as regular employees
for they remain project employees regardless of the number of projects in which they have
worked. (p. 22, Rollo.)
Article 280 of the Labor Code provides:

ART. 280. 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
(Emphasis supplied). (p. 46, Rollo.)
As an electrical contractor, the private respondent depends for its business on the contracts it is able to obtain
from real estate developers and builders of buildings. Since its work depends on the availability of such
contracts or "projects," necessarily the duration of the employment of its work force is not permanent but co-
terminus with the projects to which they are assigned and from whose payrolls they are paid. It would be
extremely burdensome for their employer who, like them, depends on the availability of projects, if it would
have to carry them as permanent employees and pay them wages even if there are no projects for them to
work on. We hold, therefore, that the NLRC did not abuse its discretion in finding, based on substantial
evidence in the records, that the petitioners are only project workers of the private respondent.
This case is similar to Sandoval Shipyards, Inc. vs. NLRC, 136 SCRA 675 (1985), where we held:
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. (P. 48, Rollo.)
Petitioners' invocation of the resolution of this Court in Romago Electric Company, Inc, vs. Romago Electric
United Workers Union-Christian Labor Organization, (REWU-CLOP), et al., G.R. No. 79774, February 1, 1988,
where this Court dismissed the petition, is not well taken. As pointed out by the public respondent, the issue in
that case was whether the members of the union may properly participate in the holding of a certification
election. Since the petitioners in their complaint for illegal dismissal dated July 28, 1986 (Annex A of petition)
averred that they do not belong to any union, the ruling in Romago vs, REWU-CLOP may not apply to them. In
their Reply to the public respondents' Comment in this case, they disclosed that they are members and officers
of a new union which they organized on March 13, 1988 (pp. 62-63, Rollo). That supervening fact, however, has
no relevance to this case.
We find no reason to depart from the well-settled rule that findings of fact of labor officials are generally
conclusive and binding upon this Court when supported by substantial evidence, as in this case (Edi-Staff
Builders International, Inc. vs, Leogardo, Jr., 152 SCRA 453; Asiaworld Publishing House, Inc. vs. Ople, 152
SCRA 219; National Federation of Labor Union vs. Ople, 143 SCRA 124; Dangan vs. NLRC, 127 SCRA 706;
Special Events & Central Shipping Office Workers Union vs. San Miguel Corp., 122 SCRA 557; Mamerto vs.
Inciong, 118 SCRA 265; Phil. Labor Alliance Council vs. Bureau of Labor Relations, 75 SCRA 162).
WHEREFORE, the petition for certiorari is dismissed for lack of merit. No costs.
SO ORDERED.
67. G.R. No. 106090 February 28, 1994
RICARDO FERNANDEZ, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and D. M. CONSUNJI, INC., respondents.
Gaston V. Taquio for petitioner.
Marcos S. Pagaspas for private respondent.
NOCON, J.:
Forming the crux of the matter in this petition for certiorari is the question of whether or not the National Labor
Relations Commission acted with grave abuse of discretion in reversing the Labor Arbiter's decision by
dismissing the complaints for illegal dismissal, one of which is petitioner's, on the finding that they were
project employees.
Petitioner was hired as a laborer at the D.M. Consunji, Inc., a construction firm, on November 5, 1974. He
became a skilled welder and worked for private respondent until March 23, 1986 when his employment was
terminated on the ground that the project petitioner had been assigned to was already completed and there
was no more work for him to do.
Skeptic of private respondent's reason, petitioner brought his plight before the Labor Arbiter who consolidated
the same with three (3) other separate complaints for illegal dismissal and various money claims against
private respondent. After filing their respective position papers and other documents pertinent to their
causes/defenses, the parties agreed to submit the case for decision based on record.
On May 12, 1988, Labor Arbiter Fernando V. Cinco rendered a decision, finding that complainants worked
continuously in various projects ranging from five (5) to twenty (20) years and belonged to a work pool, the
dispositive portion of which states as follows:
WHEREFORE, premises considered, the terminations by respondent of herein complainants are

hereby declared illegal. Consequently, respondent is ordered to reinstate the complainants, who
have not yet reached the retirement age, to their former positions plus backwages of one (1)
year.
Anent complainants who have already reach the retirement age of sixty (60) years as of the date
of this decision, respondent is thereby ordered to pay said complainants their
retirement/separation benefits equivalent to one half (1/2) month salary for every year of
service, a fraction of at least six (6) months being considered as one (1) whole year.
Moreover, respondent is ordered to pay all complainants their service incentive leave for the
past three (3) years; and to pay complainants Ricardo Fernandez, Gaudencio Merhan and
Rolando Serona their 13th month pay likewise for the past three (3) years.
The complaints of Amador Borromeo, Jesus Espiritu and Ramon Celestial are hereby dismissed
in view of their receipt of Separation pay and their execution of quitclaims in favor of herein
respondent.
The other claims are likewise dismissed for lack of merit.
SO ORDERED.
Metro Manila, Philippines. 12 May 1988.1
Private respondent questioned on appeal the aforesaid decision of the Labor Arbiter on the ground that the
complainants were all project employees who were hired on a project-to-project basis, depending on the
availability of projects that the former was able to close with its clients. Respondent pointed to the gaps in
complainants' respective employment histories to show that they were indeed hired on an "off-and-on" basis.
In view of the lack of evidence on record to prove the continuous employment of complainants-appellees, and
that on the contrary, what was proven was the intermittent nature of their work as shown by the different
project contracts, the respondent Commission concluded that complainants-appellees were project
employees. The dispositive portion of the decision dated September 29, 1989 of respondent Commission
reads:
WHEREFORE, the decision of the Labor Arbiter is hereby set aside and a new one entered
dismissing the complaints filed by complainants-appellees for lack of merit. 2
From said decision, the complainants-appellees interposed a motion for reconsideration which was denied for
lack of merit on July 19, 1991. Respondent Commission affirmed its finding that complainants-appellees were
project employees. As such, the nature of their employment did not change by the number of projects in which
they have rendered service. Respondent Commission also noted that the motion for reconsideration was filed
only on January 29, 1990 which was beyond the ten-day reglementary period from date of receipt of the
decision on November 13, 1989.
Without any mention of the denial of said motion for reconsideration, petitioner alone comes before this Court
on a petition filed on July 21, 1992 and assails the decision dated September 29, 1989 of respondent
Commission contending that it is more in keeping with the intent and spirit of the law to consider him and the
thirteen (13) other complainants in the consolidated cases as regular employees.
At the outset, it is obvious that the petition was not filed within a reasonable time from receipt of the
questioned decision on November 13, 1989 as the petition was filed only on July 21, 1992. Neither does the
filing of the petition appear to be reasonable from the date of receipt of the denial of the motion for
reconsideration on August 2, 1991. Reckoned from this later date, petitioner waited for almost one year before
he availed of this extraordinary remedy of certiorari. We have consistently stated that "the yardstick to measure
the timeliness of a petition for certiorari is the reasonableness of the duration of time that had expired from the
commission of the acts complained of up to the institution of the proceedings to annul the same." 3 Without
doubt, petitioner's negligence or indifference for such a long period of time has in the meantime rendered the
questioned decision final and no longer assailable.
Even if we were to dispense with the requirement that the petition should be filed within a reasonable time, the
petition would still have to be dismissed on the merits. Private respondent presented material documents
showing that petitioner was hired as a project employee with the specific dates of hiring, the duration of hiring,
the dates of his lay-offs, including the lay-off reports and the termination reports submitted to the then Ministry
of Labor and Employment. Such data covered the period from November 5, 1974 to March 23, 1986.
Inasmuch as the documentary evidence clearly showed gaps of a month or months between the hiring of
petitioner in the numerous projects wherein he was assigned, the ineluctable conclusion is that petitioner has
not continuously worked with private respondent but only intermittently as he was hired solely for specific
projects. As such, he is governed by Policy Instruction No. 20, the pertinent portions of which read as follows:
Generally, there are two types of employees in the construction industry, namely 1) Project
Employees and 2) Non-project Employees.
Project employees are those employed in connection with a particular construction project.
Non-project employees are those employed by a construction company without reference to a
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.
Petitioner cites Article 280 of the Labor Code as legal basis for the decision of the Labor Arbiter in his favor.
The text of Article 280 states as follows:
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
where the work or services to be performed is seasonal in nature and the employment is for the
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.
Petitioner claims that the above-quoted proviso in Article 280 of the Labor Code supports his claim that he
should be regarded as a regular employee.
We disagree. The proviso in the second paragraph of Article 280 of the Labor Code has recently been
explained in Mercado v. NLRC,4 where it was held that said proviso deems as regular employees only those
"casual" employees who have rendered at least one year of service regardless of the fact that such service
may be continuous or broken. It is not applicable to "project" employees, who are specifically excepted
therefrom. Thus, the Court therein said:
The general rule is that the office of a proviso is to qualify or modify only the phrase
immediately preceding it or restrain or limit the generality of the clause that it immediately
follows. (Statutory Construction by Ruben Agpalo, 1986 ed., p. 173). Thus, it has been held that
a proviso is to be construed with reference to the immediately preceding part of the provision to
which it is attached, and not to the statute itself or to other sections thereof. (Chinese Flour
Importers Association v. Price Stabilization Board, 89 Phil. 469 (1951); Arenas v. City of San
Carlos, G.R. No. 24024, April 5, 1978, 82 SCRA 318 (1978). The only exception to the rule is
where the clear legislative intent is to restrain or qualify not only the phrase immediately
preceding it (the proviso) but also earlier provisions of the statute or even the statute itself as a
whole. (Commissioner of Internal Revenue v. Filipinas Compania de Seguros, 107 Phil. 1055
(1960)
Indeed, a careful reading of the proviso readily discloses that the same relates to employment where the
employee is engaged to perform activities that are usually necessary or desirable in the usual business or
trade of the employer but hastens to qualify that project employment is specifically exempted therefrom.
Finally, petitioner relies on Policy Instruction No. 20 which was issued by then Secretary Blas F. Ople to
stabilize employer-employee relations in the construction industry to support his contention that workers in the
construction industry may now be considered regular employees after their long years of service with private
respondent. The pertinent provision of Policy Instruction No. 20 reads:
Members of a work pool from which a construction company draws its project employees, if
considered employees of the construction company while in the work pool, are non-project
employees or employees for an indefinite period. If they are employed in a particular project, the
completion of the project or of any phase thereof will not mean severance of employer-
employee relationship.
Respondent Commission correctly observed in its decision that complainants, one of whom petitioner, failed to
consider the requirement in Policy Instruction No. 20 that to qualify as member of a work pool, the worker
must still be considered an employee of the construction company while in the work pool. In other words, there
must be proof to the effect that petitioner was under an obligation to be always available on call of private
respondent and that he was not free to offer his services to other employees. Unfortunately, petitioner
miserably failed to introduce any evidence of such nature during the times when there were no project.
Noteworthy in this case is the fact that herein private respondent's lay-off reports and the termination reports
were duly submitted to the then Ministry of Labor and Employment everytime a project was completed in
accordance with Policy Instruction No. 20, which provides:
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 a clearance from the Secretary of Labor in
connection with such termination. What is required of the company is a report to the nearest
Public Employment Office for statistical purposes.
The presence of this factor makes this case different from the cases decided by the Court where the
employees were deemed regular employees. The cases of Ochoco v. National Labor Relations
Commission,5 Philippine National Construction Corporation v. National Labor Relations Commission,6 Magante v.
National Labor Relations Commission,7 and Philippine National Construction Corporation v. National Labor
Relations, et al.,8 uniformly held that the failure of the employer to report to the nearest employment office the
termination of workers everytime a project is completed proves that the employees are not project employees.
Contrariwise, the faithful and regular effort of private respondent in reporting every completion of its project
and submitting the lay-off list of its employees proves the nature of employment of the workers involved
therein as project employees. Given this added circumstance behind petitioner's employment, it is clear that he
does not belong to the work pool from which the private respondent would draw workers for assignment to
other projects at its discretion.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED in view of the foregoing reasons.
SO ORDERED.
68. G.R. No. 109902 August 2, 1994
ALU-TUCP, Representing Members: ALAN BARINQUE, with 13 others, namely: ENGR. ALAN G. BARINQUE,
ENGR. DARRELL LEE ELTAGONDE, EDUARD H. FOOKSON, JR., ROMEO R. SARONA, RUSSELL GACUS, JERRY
BONTILAO, EUSEBIO MARIN, JR., LEONIDO ECHAVEZ, BONIFACIO MEJOS, EDGAR S. BONTUYAN, JOSE G.
GARGUENA, JR., OSIAS B. DANDASAN, and GERRY I. FETALVERO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL STEEL CORPORATION (NSC), respondents.
Leonard U. Sawal for petitioners.
Saturnino Mejorada for private respondent.
FELICIANO, J.:
In this Petition for Certiorari, petitioners assail the Resolution of the National Labor Relations Commission
("NLRC") dated 8 January 1993 which declared petitioners to be project employees of private respondent
National Steel Corporation ("NSC"), and the NLRC's subsequent Resolution of 15 February 1993, denying
petitioners' motion for reconsideration.
Petitioners plead that they had been employed by respondent NSC in connection with its Five Year Expansion
Program (FAYEP I & II) 1 for varying lengths of time when they were separated from NSC's service:
Employee Date Nature of Separated
Employed Employment
1. Alan Barinque 5-14-82 Engineer 1 8-31-91
2. Jerry Bontilao 8-05-85 Engineer 2 6-30-92
3. Edgar Bontuyan 11-03-82 Chairman to present
4. Osias Dandasan 9-21-82 Utilityman 1991
5. Leonido Echavez 6-16-82 Eng. Assistant 6-30-92
6. Darrell Eltagonde 5-20-85 Engineer 1 8-31-91
7. Gerry Fetalvero 4-08-85 Mat. Expediter regularized
8. Eduard Fookson 9-20-84 Eng. Assistant 8-31-91
9. Russell Gacus 1-30-85 Engineer 1 6-30-92
10. Jose Garguena 3-02-81 Warehouseman to present
11. Eusebio Mejos 11-17-82 Survey Aide 8-31-91
12. Bonifacio Mejos 11-17-82 Surv. Party Head 1992
13. Romeo Sarona 2-26-83 Machine Operator 8-31-912
On 5 July 1990, petitioners filed separate complaints for unfair labor practice, regularization and monetary
benefits with the NLRC, Sub-Regional Arbitration Branch XII, Iligan City.
The complaints were consolidated and after hearing, the Labor Arbiter in a Decision dated 7 June 1991,
declared petitioners "regular project employees who shall continue their employment as such for as long as
such [project] activity exists," but entitled to the salary of a regular employee pursuant to the provisions in the
collective bargaining agreement. It also ordered payment of salary differentials. 3
Both parties appealed to the NLRC from that decision. Petitioners argued that they were regular, not project,
employees. Private respondent, on the other hand, claimed that petitioners are project employees as they were
employed to undertake a specific project — NSC's Five Year Expansion Program (FAYEP I & II).
The NLRC in its questioned resolutions modified the Labor Arbiter's decision. It affirmed the Labor Arbiter's
holding that petitioners were project employees since they were hired to perform work in a specific
undertaking — the Five Years Expansion Program, the completion of which had been determined at the time of
their engagement and which operation was not directly related to the business of steel manufacturing. The
NLRC, however, set aside the award to petitioners of the same benefits enjoyed by regular employees for lack
of legal and factual basis.
Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to show any
grave abuse of discretion or any act without or in excess of jurisdiction on the part of the NLRC in rendering its
questioned resolutions of 8 January 1993 and 15 February 1993.
The law on the matter is Article 280 of the Labor Code which reads in full:
Art. 280. Regular and Casual Employment — The provisions of the written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, and employment
where the work or services to be performed is seasonal in nature and the employment is for the
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 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. (Emphasis
supplied)
Petitioners argue that they are "regular" employees of NSC because: (i) their jobs are "necessary, desirable and
work-related to private respondent's main business, steel-making"; and (ii) they have rendered service for six
(6) or more years to private respondent NSC. 4
The basic issue is thus whether or not petitioners are properly characterized as "project employees" rather than
"regular employees" of NSC. This issue relates, of course, to an important consequence: the services of project
employees are co-terminous with the project and may be terminated upon the end or completion of the project
for which they were hired. 5 Regular employees, in contract, are legally entitled to remain in the service of their
employer until that service is terminated by one or another of the recognized modes of termination of service
under the Labor Code. 6
It is evidently important to become clear about the meaning and scope of the term "project" in the present
context. The "project" for the carrying out of which "project employees" are hired would ordinarily have some
relationship to the usual business of the employer. Exceptionally, the "project" undertaking might not have an
ordinary or normal relationship to the usual business of the employer. In this latter case, the determination of
the scope and parameeters of the "project" becomes fairly easy. It is unusual (but still conceivable) for a
company to undertake a project which has absolutely no relationship to the usual business of the company;
thus, for instance, it would be an unusual steel-making company which would undertake the breeding and
production of fish or the cultivation of vegetables. From the viewpoint, however, of the legal characterization
problem here presented to the Court, there should be no difficulty in designating the employees who are
retained or hired for the purpose of undertaking fish culture or the production of vegetables as "project
employees," as distinguished from ordinary or "regular employees," so long as the duration and scope of the
project were determined or specified at the time of engagement of the "project employees." 7 For, as is evident
from the provisions of Article 280 of the Labor Code, quoted earlier, 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.
In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2)
distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within
the regular or usual business of the employer company, but which is distinct and separate, and identifiable as
such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or
determinable times. The typical example of this first type of project is a particular construction job or project of
a construction company. A construction company ordinarily carries out two or more discrete identifiable
construction projects: e.g., a twenty-five- storey hotel in Makati; a residential condominium building in Baguio
City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these
separate projects, the scope and duration of which has been determined and made known to the employees at
the time of employment, are properly treated as "project employees," and their services may be lawfully
terminated at completion of the project.
The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular
business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the
ordinary or regular business operations of the employer. The job or undertaking also begins and ends at
determined or determinable times. The case at bar presents what appears to our mind as a typical example of
this kind of "project."
NSC undertook the ambitious Five Year Expansion Program I and II with the ultimate end in view of expanding
the volume and increasing the kinds of products that it may offer for sale to the public. The Five Year
Expansion Program had a number of component projects: e.g., (a) the setting up of a "Cold Rolling Mill
Expansion Project"; (b) the establishment of a "Billet Steel-Making Plant" (BSP); (c) the acquisition and
installation of a "Five Stand TDM"; and (d) the "Cold Mill Peripherals Project." 8 Instead of contracting out to an
outside or independent contractor the tasks of constructing the buildings with related civil and electrical works
that would house the new machinery and equipment, the installation of the newly acquired mill or plant
machinery and equipment and the commissioning of such machinery and equipment, NSC opted to execute
and carry out its Five Yeear Expansion Projects "in house," as it were, by administration. The carrying out of the
Five Year Expansion Program (or more precisely, each of its component projects) constitutes a distinct
undertaking identifiable from the ordinary business and activity of NSC. Each component project, of course,
begins and ends at specified times, which had already been determined by the time petitioners were engaged.
We also note that NSC did the work here involved — the construction of buildings and civil and electrical works,
installation of machinery and equipment and the commissioning of such machinery — only for itself. Private
respondent NSC was not in the business of constructing buildings and installing plant machinery for the
general business community, i.e., for unrelated, third party, corporations. NSC did not hold itself out to the
public as a construction company or as an engineering corporation.
Which ever type of project employment is found in a particular case, a common basic requisite is that the
designation of named employees as "project employees" and their assignment to a specific project, are
effected and implemented in good faith, and not merely as a means of evading otherwise applicable
requirements of labor laws.
Thus, the particular component projects embraced in the Five Year Expansion Program, to which petitioners
were assigned, were distinguishable from the regular or ordinary business of NSC which, of course, is the
production or making and marketing of steel products. During the time petitioners rendered services to NSC,
their work was limited to one or another of the specific component projects which made up the FAYEP I and II.
There is nothing in the record to show that petitioners were hired for, or in fact assigned to, other purposes,
e.g., for operating or maintaining the old, or previously installed and commissioned, steel-making machinery
and equipment, or for selling the finished steel products.
We, therefore, agree with the basic finding of the NLRC (and the Labor Arbiter) that the petitioners were indeed
"project employees:"
It is well established by the facts and evidence on record that herein 13 complainants were hired
and engaged for specific activities or undertaking the period of which has been determined at
time of hiring or engagement. It is of public knowledge and which this Commission can safely
take judicial notice that the expansion program (FAYEP) of respondent NSC consist of various
phases [of] project components which are being executed or implemented independently or
simultaneously from each other . . .
In other words, the employment of each "project worker" is dependent and co-terminous with
the completion or termination of the specific activity or undertaking [for which] he was hired
which has been pre-determined at the time of engagement. Since, there is no showing that they
(13 complainants) were engaged to perform work-related activities to the business of
respondent which is steel-making, there is no logical and legal sense of applying to them the
proviso under the second paragraph of Article 280 of the Labor Code, as amended.
xxx xxx xxx
The present case therefore strictly falls under the definition of "project employees" on paragraph
one of Article 280 of the Labor Code, as amended. Moreover, it has been held that the length of
service of a project employee is not the controlling test of employment tenure but whether or
not "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". (See
Hilario Rada v. NLRC, G.R. No. 96078, January 9, 1992; and Sandoval Shipping, Inc. v. NLRC, 136
SCRA 674 (1985). 9
Petitioners next claim that their service to NSC of more than six (6) years should qualify them as regular
employees. We believe this claim is without legal basis. The simple fact that the employment of petitioners as
project employees had gone beyond one (1) year, does not detract from, or legally dissolve, their status as
project employees. 10 The second paragraph of Article 280 of the Labor Code, quoted above, providing that an
employee who has served for at least one (1) year, shall be considered a regular employee, relates to casual
employees, not to project employees.
In the case of Mercado, Sr. vs. National Labor Relations Commission, 11 this Court ruled that the proviso in the
second paragraph of Article 280 relates only to casual employees and is not applicable to those who fall within
the definition of said Article's first paragraph, i.e., project employees. The familiar grammatical rule is that a
proviso is to be construed with reference to the immediately preceding part of the provision to which it is
attached, and not to other sections thereof, unless the clear legislative intent is to restrict or qualify not only
the phrase immediately preceding the proviso but also earlier provisions of the statute or even the statute itself
as a whole. No such intent is observable in Article 280 of the Labor Code, which has been quoted earlier.
ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is hereby DISMISSED for lack of merit. The
Resolutions of the NLRC dated 8 January 1993 and 15 February 1993 are hereby AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
69. G.R. No. 79869 September 5, 1991
FORTUNATO MERCADO, SR., ROSA MERCADO, FORTUNATO MERCADO, JR., ANTONIO MERCADO, JOSE
CABRAL, LUCIA MERCADO, ASUNCION GUEVARA, ANITA MERCADO, MARINA MERCADO, JULIANA
CABRAL, GUADALUPE PAGUIO, BRIGIDA ALCANTARA, EMERLITA MERCADO, ROMEO GUEVARA, ROMEO
MERCADO and LEON SANTILLAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), THIRD DIVISION; LABOR ARBITER LUCIANO AQUINO,
RAB-III; AURORA L. CRUZ; SPOUSES FRANCISCO DE BORJA and LETICIA DE BORJA; and STO. NIÑO
REALTY, INCORPORATED, respondents.
Servillano S. Santillan for petitioners.

Luis R. Mauricio for private respondents.
PADILLA, J.:
Assailed in this petition for certiorari is the decision * of the respondent national Labor Relations Commission
(NLRC) dated 8 August 1984 which affirmed the decision of respondent Labor Arbiter Luciano P. Aquino with
the slight modification of deleting the award of financial assistance to petitioners, and the resolution of the
respondent NLRC dated 17 August 1987, denying petitioners' motion for reconsideration.
This petition originated from a complaint for illegal dismissal, underpayment of wages, non-payment of
overtime pay, holiday pay, service incentive leave benefits, emergency cost of living allowances and 13th
month pay, filed by above-named petitioners against private respondents Aurora L. Cruz, Francisco Borja,
Leticia C. Borja and Sto. Niño Realty Incorporated, with Regional Arbitration Branch No. III, National Labor
Relations Commission in San Fernando, Pampanga. 1
Petitioners alleged in their complaint that they were agricultural workers utilized by private respondents in all
the agricultural phases of work on the 7 1/2 hectares of ace land and 10 hectares of sugar land owned by the
latter; that Fortunato Mercado, Sr. and Leon Santillan worked in the farm of private respondents since 1949,
Fortunato Mercado, Jr. and Antonio Mercado since 1972 and the rest of the petitioners since 1960 up to April
1979, when they were all allegedly dismissed from their employment; and that, during the period of their
employment, petitioners received the following daily wages:
From 1962-1963 — P1.50

1963-1965 — P2.00
1965-1967 — P3.00
1967-1970 — P4.00
1970-1973 — P5.00
1973-1975 — P5.00
1975-1978 — P6.00
1978-1979 — P7.00
Private respondent Aurora Cruz in her answer to petitioners' complaint denied that said petitioners were her
regular employees and instead averred that she engaged their services, through Spouses Fortunato Mercado,
Sr. and Rosa Mercado, their "mandarols", that is, persons who take charge in supplying the number of workers
needed by owners of various farms, but only to do a particular phase of agricultural work necessary in rice
production and/or sugar cane production, after which they would be free to render services to other farm
owners who need their services.2
The other private respondents denied having any relationship whatsoever with the petitioners and state that
they were merely registered owners of the land in question included as corespondents in this case. 3
The dispute in this case revolves around the issue of whether or not petitioners are regular and permanent
farm workers and therefore entitled to the benefits which they pray for. And corollary to this, whether or not
said petitioners were illegally dismissed by private respondents.
Respondent Labor Arbiter Luciano P. Aquino ruled in favor of private respondents and held that petitioners
were not regular and permanent workers of the private respondents, for the nature of the terms and conditions
of their hiring reveal that they were required to perform phases of agricultural work for a definite period of time
after which their services would be available to any other farm owner. 4 Respondent Labor Arbiter deemed
petitioners' contention of working twelve (12) hours a day the whole year round in the farm, an exaggeration,
for the reason that the planting of lice and sugar cane does not entail a whole year as reported in the findings
of the Chief of the NLRC Special Task Force.5 Even the sworn statement of one of the petitioners, Fortunato
Mercado, Jr., the son of spouses Fortunato Mercado, Sr. and Rosa Mercado, indubitably show that said
petitioners were hired only as casuals, on an "on and off" basis, thus, it was within the prerogative of private
respondent Aurora Cruz either to take in the petitioners to do further work or not after any single phase of
agricultural work had been completed by them. 6
Respondent Labor Arbiter was also of the opinion that the real cause which triggered the filing of the complaint
by the petitioners who are related to one another, either by consanguinity or affinity, was the filing of a criminal
complaint for theft against Reynaldo Mercado, son of spouses Fortunate Mercado, Sr. and Rosa Mercado, for
they even asked the help of Jesus David, Zone Chairman of the locality to talk to private respondent, Aurora
Cruz regarding said criminal case.7 In his affidavit, Jesus David stated under oath that petitioners were never
regularly employed by private respondent Aurora Cruz but were, on-and-off hired to work and render services
when needed, thus adding further support to the conclusion that petitioners were not regular and permanent
employees of private respondent Aurora Cruz.8
Respondent Labor Arbiter further held that only money claims from years 1976-1977, 1977-1978 and 1978-
1979 may be properly considered since all the other money claims have prescribed for having accrued beyond
the three (3) year period prescribed by law.9 On grounds of equity, however, respondent Labor Arbiter awarded
petitioners financial assistance by private respondent Aurora Cruz, in the amount of Ten Thousand Pesos
(P10,000.00) to be equitably divided among an the petitioners except petitioner Fortunato Mercado, Jr. who
had manifested his disinterest in the further prosecution of his complaint against private respondent. 10
Both parties filed their appeal with the National Labor Relations Commissions (NLRC). Petitioners questioned
respondent Labor Arbiter's finding that they were not regular and permanent employees of private respondent
Aurora Cruz while private respondents questioned the award of financial assistance granted by respondent
Labor Arbiter.
The NLRC ruled in favor of private respondents affirming the decision of the respondent Labor Arbiter, with the
modification of the deletion of the award for financial assistance to petitioners. The dispositive portion of the
decision of the NLRC reads:
WHEREFORE, the Decision of Labor Arbiter Luciano P. Aquino dated March 3, 1983 is hereby modified
in that the award of P10,000.00 financial assistance should be deleted. The said Decision is affirmed in
all other aspects.
SO ORDERED.11
Petitioners filed a motion for reconsideration of the Decision of the Third Division of the NLRC dated 8 August
1984; however, the NLRC denied tills motion in a resolution dated 17 August 1987. 12
In the present Petition for certiorari, petitioners seek the reversal of the above-mentioned rulings. Petitioners
contend that respondent Labor Arbiter and respondent NLRC erred when both ruled that petitioners are not
regular and permanent employees of private respondents based on the terms and conditions of their hiring, for
said findings are contrary to the provisions of Article 280 of the Labor Code. 13 They submit that petitioners'
employment, even assuming said employment were seasonal, continued for so many years such that, by
express provision of Article 280 of the Labor Code as amended, petitioners have become regular and
permanent employees.14
Moreover, they argue that Policy Instruction No. 12 15 of the Department of Labor and Employment clearly lends
support to this contention, when it states:
PD 830 has defined the concept of regular and casual employment. What determines regularity or
casualness is not the employment contract, written or otherwise, but the nature of the job. If the job is
usually necessary or desirable to the main business of the employer, then employment is regular. If not,
then the employment is casual. Employment for a definite period which exceeds one (1) year shall be
considered re for the duration of the definite period.
This concept of re and casual employment is designed to put an end to casual employment in regular
jobs which has been abused by many employers to prevent so-called casuals from enjoying the
benefits of regular employees or to prevent casuals from joining unions.
This new concept should be strictly enforced to give meaning to the constitutional guarantee of
employment tenure.16
Tested under the laws invoked, petitioners submit that it would be unjust, if not unlawful, to consider them as
casual workers since they have been doing all phases of agricultural work for so many years, activities which
are undeniably necessary, desirable and indispensable in the rice and sugar cane production business of the
private respondents.17
In the Comment filed by private respondents, they submit that the decision of the Labor Arbiter, as aimed by
respondent NLRC, that petitioners were only hired as casuals, is based on solid evidence presented by the
parties and also by the Chief of the Special Task Force of the NLRC Regional Office and, therefore, in
accordance with the rule on findings of fact of administrative agencies, the decision should be given great
weight.18 Furthermore, they contend that the arguments used by petitioners in questioning the decision of the
Labor Arbiter were based on matters which were not offered as evidence in the case heard before the regional
office of the then Ministry of Labor but rather in the case before the Social Security Commission, also between
the same parties.19
Public respondent NLRC filed a separate comment prepared by the Solicitor General. It submits that it has long
been settled that findings of fact of administrative agencies if supported by substantial evidence are entitled to
great weight.20 Moreover, it argues that petitioners cannot be deemed to be permanent and regular employees
since they fall under the exception stated in Article 280 of the Labor Code, which reads:
The provisions of written agreements 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.21 (emphasis supplied)
The Court resolved to give due course to the petition and required the parties to submit their respective
memoranda after which the case was deemed submitted for decision.
The petition is not impressed with merit.
The invariable rule set by the Court in reviewing administrative decisions of the Executive Branch of the
Government is that the findings of fact made therein are respected, so long as they are supported by
substantial evidence, even if not overwhelming or preponderant; 22 that it is not for the reviewing court to weigh
the conflicting evidence, determine the credibility of the witnesses or otherwise substitute its own judgment for
that of the administrative agency on the sufficiency of the evidence; 23 that the administrative decision in
matters within the executive's jurisdiction can only be set aside upon proof of gross abuse of discretion, fraud,
or error of law.24
The questioned decision of the Labor Arbiter reads:
Focusing the spotlight of judicious scrutiny on the evidence on record and the arguments of both
parties, it is our well-discerned opinion that the petitioners are not regular and permanent workers of
the respondents. The very nature of the terms and conditions of their hiring reveal that the petitioners
were required to perform p of cultural work for a definite period, after which their services are available
to any farm owner. We cannot share the arguments of the petitioners that they worked continuously the
whole year round for twelve hours a day. This, we feel, is an exaggeration which does not deserve any
serious consideration inasmuch as the plan of rice and sugar cane does not entail a whole year
operation, the area in question being comparatively small. It is noteworthy that the findings of the Chief
of the Special Task Force of the Regional Office are similar to this.
In fact, the sworn statement of one of the petitioners Fortunato Mercado, Jr., the son of spouses
Fortunato Mercado, Sr. and Rosa Mercado, indubitably shows that said petitioners were only hired as
casuals, on-and-off basis. With this kind of relationship between the petitioners and the respondent
Aurora Cruz, we feel that there is no basis in law upon which the claims of the petitioners should be
sustained, more specially their complaint for illegal dismissal. It is within the prerogative of respondent
Aurora Cruz either to take in the petitioners to do further work or not after any single phase of
agricultural work has been completed by them. We are of the opinion that the real cause which
triggered the filing of this complaint by the petitioners who are related to one another, either by
consanguinity or affinity was due to the filing of a criminal complaint by the respondent Aurora Cruz
against Reynaldo Mercado, son of spouses Fortunato Mercado, Sr. and Rosa Mercado. In April 1979,
according to Jesus David, Zone Chairman of the locality where the petitioners and respondent reside,
petitioner Fortunato Mercado, Sr. asked for help regarding the case of his son, Reynaldo, to talk with
respondent Aurora Cruz and the said Zone Chairman also stated under oath that the petitioners were
never regularly employed by respondent Aurora Cruz but were on-and-off hired to work to render
services when needed.25
A careful examination of the foregoing statements reveals that the findings of the Labor Arbiter in the case are
ably supported by evidence. There is, therefore, no circumstance that would warrant a reversal of the
questioned decision of the Labor Arbiter as affirmed by the National Labor Relations Commission.
The contention of petitioners that the second paragraph of Article 280 of the Labor Code should have been
applied in their case presents an opportunity to clarify the afore-mentioned provision of law.
Article 280 of the Labor Code reads in full:
Article 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 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.
The first paragraph answers the question of who are employees. It states that, regardless of any written or oral
agreement to the contrary, an employee is deemed regular where he is engaged in necessary or desirable
activities in the usual business or trade of the employer, except for project employees.
A project employee has been defined to be 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 season26 as in the present case.
The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fan
under the definition of the preceding paragraph. The proviso, in said second paragraph, deems as regular
employees those "casual" employees who have rendered at least one year of service regardless of the fact that
such service may be continuous or broken.
Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case
and that the Labor Arbiter should have considered them regular by virtue of said proviso. The contention is
without merit.
The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it
or restrain or limit the generality of the clause that it immediately follows. 27 Thus, it has been held that a
proviso is to be construed with reference to the immediately preceding part of the provision to which it is
attached, and not to the statute itself or to other sections thereof. 28 The only exception to this rule is where the
clear legislative intent is to restrain or qualify not only the phrase immediately preceding it (the proviso) but
also earlier provisions of the statute or even the statute itself as a whole. 29
Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular
and casual employees was designed to put an end to casual employment in regular jobs, which has been
abused by many employers to prevent called casuals from enjoying the benefits of regular employees or to
prevent casuals from joining unions. The same instructions show that the proviso in the second paragraph of
Art. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land owners to further
the interests of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers
against their employees and not, as petitioners would have us believe, to prevent small-scale businesses from
engaging in legitimate methods to realize profit. Hence, the proviso is applicable only to the employees who
are deemed "casuals" but not to the "project" employees nor the regular employees treated in paragraph one of
Art. 280.
Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their
employment legally ends upon completion of the project or the season. The termination of their employment
cannot and should not constitute an illegal dismissal. 30
WHEREFORE, the petition is DISMISSED. The decision of the National Labor Relations Commission affirming
that of the Labor Arbiter, under review, is AFFIRMED. No pronouncement as to costs.
SO ORDERED.
70. G.R. No. 149440 January 28, 2003
HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners,
vs.
NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE, respondents.
PANGANIBAN, J.:
Although the employers have shown that respondents performed work that was seasonal in nature, they failed
to prove that the latter worked only for the duration of one particular season. In fact, petitioners do not deny
that these workers have served them for several years already. Hence, they are regular — not seasonal —
employees.
The Case
Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the February
20, 2001 Decision of the Court of Appeals 1 (CA) in CA-GR SP No. 51033. The dispositive part of the Decision
reads:
"WHEREFORE, premises considered, the instant special civil action for certiorari is hereby DENIED." 2
On the other hand, the National Labor Relations Commission (NLRC) Decision, 3 upheld by the CA,
disposed in this wise:
"WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET ASIDE and
VACATED and a new one entered declaring complainants to have been illegally dismissed.
Respondents are hereby ORDERED to reinstate complainants except Luisa Rombo, Ramona Rombo,
Bobong Abriga and Boboy Silva to their previous position and to pay full backwages from September
1991 until reinstated. Respondents being guilty of unfair labor practice are further ordered to pay
complainant union the sum of P10,000.00 as moral damages and P5,000.00 as exemplary damages." 4
The Facts
The facts are summarized in the NLRC Decision as follows:
"Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work
and/or were choosy in the kind of jobs they wanted to perform, the records is replete with
complainants' persistence and dogged determination in going back to work.
"Indeed, it would appear that respondents did not look with favor workers' having organized themselves
into a union. Thus, when complainant union was certified as the collective bargaining representative in
the certification elections, respondents under the pretext that the result was on appeal, refused to sit
down with the union for the purpose of entering into a collective bargaining agreement. Moreover, the
workers including complainants herein were not given work for more than one month. In protest,
complainants staged a strike which was however settled upon the signing of a Memorandum of
Agreement which stipulated among others that:
'a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will
endeavor to conclude the same within thirty (30) days.
'b) The management will give priority to the women workers who are members of the union in
case work relative . . . or amount[ing] to gahit and [dipol] arises.
'c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a week.
'd) The management will provide fifteen (15) wagons for the workers and that existing
workforce prior to the actual strike will be given priority. However, in case the said workforce
would not be enough, the management can hire additional workers to supplement them.
'e) The management will not anymore allow the scabs, numbering about eighteen (18) workers[,]
to work in the hacienda; and
'f) The union will immediately lift the picket upon signing of this agreement.'
"However, alleging that complainants failed to load the fifteen wagons, respondents reneged on its
commitment to sit down and bargain collectively. Instead, respondent employed all means including
the use of private armed guards to prevent the organizers from entering the premises.
"Moreover, starting September 1991, respondents did not any more give work assignments to the
complainants forcing the union to stage a strike on January 2, 1992. But due to the conciliation efforts
by the DOLE, another Memorandum of Agreement was signed by the complainants and respondents
which provides:
'Whereas the union staged a strike against management on January 2, 1992 grounded on the dismissal
of the union officials and members;
'Whereas parties to the present dispute agree to settle the case amicably once and for all;
'Now therefore, in the interest of both labor and management, parties herein agree as follows:
'1. That the list of the names of affected union members hereto attached and made part of this
agreement shall be referred to the Hacienda payroll of 1990 and determine whether or not this
concerned Union members are hacienda workers;
'2. That in addition to the payroll of 1990 as reference, herein parties will use as guide the
subjects of a Memorandum of Agreement entered into by and between the parties last January
4, 1990;
'3. That herein parties can use other employment references in support of their respective
claims whether or not any or all of the listed 36 union members are employees or hacienda
workers or not as the case may be;
'4. That in case conflict or disagreement arises in the determination of the status of the
particular hacienda workers subject of this agreement herein parties further agree to submit the
same to voluntary arbitration;
'5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby created to be
composed of three representatives each and is given five working days starting Jan. 23, 1992 to
resolve the status of the subject 36 hacienda workers. (Union representatives: Bernardo Torres,
Martin Alas-as, Ariston Arulea Jr.)"
"Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation Meeting showed as
follows:
'The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko based on
who received their 13th month pay. The following are deemed not considered employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
'The name Orencio Rombo shall be verified in the 1990 payroll.
'The following employees shall be reinstated immediately upon availability of work:
1. Jose Dagle 7. Alejandro Tejares
2. Rico Dagle 8. Gaudioso Rombo
3. Ricardo Dagle 9. Martin Alas-as Jr.
4. Jesus Silva 10. Cresensio Abrega
5. Fernando Silva 11. Ariston Eruela Sr.
6. Ernesto Tejares 12. Ariston Eruela Jr.'
"When respondents again reneged on its commitment; complainants filed the present complaint.
"But for all their persistence, the risk they had to undergo in conducting a strike in the face of
overwhelming odds, complainants in an ironic twist of fate now find themselves being accused of
'refusing to work and being choosy in the kind of work they have to perform'." 5 (Citations omitted)
Ruling of the Court of Appeals
The CA affirmed that while the work of respondents was seasonal in nature, they were considered to be merely
on leave during the off-season and were therefore still employed by petitioners. Moreover, the workers enjoyed
security of tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal
dismissal.
The appellate court found neither "rhyme nor reason in petitioner's argument that it was the workers
themselves who refused to or were choosy in their work." As found by the NLRC, the record of this case is
"replete with complainants' persistence and dogged determination in going back to work." 6
The CA likewise concurred with the NLRC's finding that petitioners were guilty of unfair labor practice.
Hence this Petition. 7
Issues
Petitioners raise the following issues for the Court's consideration:
"A. Whether or not the Court of Appeals erred in holding that respondents, admittedly seasonal workers,
were regular employees, contrary to the clear provisions of Article 280 of the Labor Code, which
categorically state that seasonal employees are not covered by the definition of regular employees
under paragraph 1, nor covered under paragraph 2 which refers exclusively to casual employees who
have served for at least one year.
"B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, . . . and relying instead
on rulings which are not directly applicable to the case at bench, viz, Philippine Tobacco, Bacolod-
Murcia, and Gaco, . . .
"C Whether or not the Court of Appeals committed grave abuse of discretion in upholding the NLRC's
conclusion that private respondents were illegally dismissed, that petitioner[s were] guilty of unfair
labor practice, and that the union be awarded moral and exemplary damages." 8
Consistent with the discussion in petitioners' Memorandum, we shall take up Items A and B as the first issue
and Item C as the second.
The Court's Ruling
The Petition has no merit.
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review
on certiorari of CA decisions. 9 Questions of fact are not entertained. 10 The Court is not a trier of facts and, in
labor cases, this doctrine applies with greater force. 11 Factual questions are for labor tribunals to resolve. 12 In
the present case, these have already been threshed out by the NLRC. Its findings were affirmed by the
appellate court.
Contrary to petitioners' contention, the CA did not err when it held that respondents were regular employees.
Article 280 of the Labor Code, as amended, states:
"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 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 activity exist." (Italics supplied)
For respondents to be excluded from those classified as regular employees, it is not enough that they perform
work or services that are seasonal in nature. They must have also been employed only for the duration of one
season. The evidence proves the existence of the first, but not of the second, condition. The fact that
respondents — with the exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva —
repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter. Evidently,
petitioners employed respondents for more than one season. Therefore, the general rule of regular
employment is applicable.
In Abasolo v. National Labor Relations Commission, 13 the Court issued this clarification:
"[T]he test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC,
in which this Court held:
"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 trade or
business of the employer. The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least a year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity and while such activity exists.
xxx xxx xxx
". . . [T]he fact that [respondents] do not work continuously for one whole year but only for the duration
of the . . . season does not detract from considering them in regular employment since in a litany of
cases this Court has already settled that seasonal workers who are called to work from time to time
and are temporarily laid off during off-season are not separated from service in said period, but merely
considered on leave until re-employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to the case at bar. In the earlier
case, the workers were required to perform phases of agricultural work for a definite period of time, after which
their services would be available to any other farm owner. They were not hired regularly and repeatedly for the
same phase/s of agricultural work, but on and off for any single phase thereof. On the other hand, herein
respondents, having performed the same tasks for petitioners every season for several years, are considered
the latter's regular employees for their respective tasks. Petitioners' eventual refusal to use their services —
even if they were ready, able and willing to perform their usual duties whenever these were available — and
hiring of other workers to perform the tasks originally assigned to respondents amounted to illegal dismissal
of the latter.
The Court finds no reason to disturb the CA's dismissal of what petitioners claim was their valid exercise of a
management prerogative. The sudden changes in work assignments reeked of bad faith. These changes were
implemented immediately after respondents had organized themselves into a union and started demanding
collective bargaining. Those who were union members were effectively deprived of their jobs. Petitioners'
move actually amounted to unjustified dismissal of respondents, in violation of the Labor Code.
"Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers
the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a
valid and authorized cause." 16 In the case at bar, petitioners failed to prove any such cause for the dismissal of
respondents who, as discussed above, are regular employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows:
"Indeed, from respondents' refusal to bargain, to their acts of economic inducements resulting in the
promotion of those who withdrew from the union, the use of armed guards to prevent the organizers to
come in, and the dismissal of union officials and members, one cannot but conclude that respondents
did not want a union in their hacienda—a clear interference in the right of the workers to self-
organization." 17
We uphold the CA's affirmation of the above findings. Indeed, factual findings of labor officials, who are
deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not
only respect but even finality. Their findings are binding on the Supreme Court. 18 Verily, their conclusions are
accorded great weight upon appeal, especially when supported by substantial evidence. 19 Consequently, the
Court is not duty-bound to delve into the accuracy of their factual findings, in the absence of a clear showing
that these were arbitrary and bereft of any rational basis." 20
The finding of unfair labor practice done in bad faith carries with it the sanction of moral and exemplary
damages." 21
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.
SO ORDERED.

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64. G.R. No.

119523 October 10, 1997

ISABELO VIOLETA and JOVITO BALTAZAR, petitioners,

An employee shall be deemed to be casual if it is not covered by the preceding paragraph:

On such premises, the Court declared:

65. G.R. No. 125837 October 6, 2004

WHEREFORE, the Petition is DENIED. The Decision and Resolution of the Court of Appeals promulgated on 6

66. G.R. No. 82973 September 15, 1989

MARIO CARTAGENAS, JESUS N. MIRABALLES, VICTOR C. MONSOD and VICENTE BARROA, petitioners,

Isidro G. Pasana for petitioners.

Constantino B. de Jesus & Associates for private respondent.

The facts are recited in the decision of the NLRC as follows:

Respondent Romago is a general contractor engaged in contracting and sub-contracting of

Individual complainants are employed by the respondent in connection with particular

1. Jesus N. Miraballes Project Assigned Period Covered

Nat'l Bookstore 2/26/80-8/28/80

A. Payumo's Res. 9/10/80

State Center 3/05/81-7/13/81

FEBTC Bldg. 7/14/81-9/21/81

SMC Complex 9/22/81-9/10/84

PNB Finance Complex 9/11/84-7/12/86

(Annexes 1 to 25, respondent's Position Paper)

Project Assigned Period Covered

MMRH Project 4/13/76-2/02/80

Manila Hotel 2/03/80-7/19/81

PNB Project 7/20/81-7/16/84

Manila Hotel 7/17/84-7/02/84

PNB Finance Center 10/3/84-7/12/86

(Annexes 30 to 41, Ibid)

Project Assigned Period Covered

SMC Hoc. Project 7/5/82-1/21/85

PNB Finance Complex 1/22/85-7/12/86

(Annexes 42 to 47, Ibid)

Project Assigned Period Covered

PNB Finance Complex 3/26/82-7/12/86

(Annexes 52 to 54, Ibid)

1. Mirabelles and Monsod August 2/86

2. Barroa August 11/86

3. Cartagenas August 4/86

(Annexes 26 to 29-B; '39-4l'; 48 to 51 -B; '55 to 58-A', Ibid)

Assigned to FEBTC G.P. FORMOSO

Salary P18.50/day & allowance

Conditions Hired for above project

DATE: July 14, 1981

Engr. C.A. Castro

SGD. JESUS N. MIRABALLES

(Assignment slip of Jesus N. Miraballes, Annex 17, Ibid.)

xxx xxx xxx

Article 280 of the Labor Code provides:

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:

WHEREFORE, the petition for certiorari is dismissed for lack of merit. No costs.

67. G.R. No. 106090 February 28, 1994

Gaston V. Taquio for petitioner.

Marcos S. Pagaspas for private respondent.

WHEREFORE, premises considered, the terminations by respondent of herein complainants are

The other claims are likewise dismissed for lack of merit.

Metro Manila, Philippines. 12 May 1988.1

An employment shall be deemed to be casual if it is not covered by the preceding

68. G.R. No. 109902 August 2, 1994

Leonard U. Sawal for petitioners.

Saturnino Mejorada for private respondent.

Employee Date Nature of Separated

xxx xxx xxx

69. G.R. No. 79869 September 5, 1991