PETITIONER Herma Shipyard,Inc. and Mr.

Herminio Esguerra
RESPONDENT Danilo Oliveros, Jojit Basa et. al
CASE NUMBER: G.R. NO. 208936
Respondents Danilo Oliveros, et. al., are alleged project-based employees of the
Herma Shipyard, Inc filed before the Arbitration Branch III, San Fernando, Pampanga
for illegal dismissal, regularization and non- payment of service incentive against the
petitioners.
FACTS
Respondents alleged that their continuous and uninterrupted employment, the
petitioners made them sign an employment contract for a fixed period ranging one to
four months. They further alleged that the Herma Shipyard, Inc. resorted to this
scheme to defeat their right to security of tenure.

The Labor Arbiter dismissed the complaint of the respondents for lack of merit. They
held that the Danilo Oliveros, et. al. was project- based employees and they were
LABOR ARBITER validly terminated upon completion of the project. Labor arbiter also denied the claim
RULING: for moral, exemplary damages and the attorney’s fee for lack of merit.

Danilo and the other respondents appealed the ruling to the NLRC
The NLRC affirmed in toto and sustained the finding of the Labor Arbiter that based on
their employment contracts, respondents were project- based employees hired to do a
particular project for a specific period of time.

NLRC RULING: Danilo and the other respondents moved for reconsideration but NLRC denied the
Motion for Reconsideration.

After the motion for reconsideration was denied, Danilo and the other respondents
filed a petition for certiorari.
COURT OF APPEALS The CA set aside the decision of the Labor arbiter and the NLRC
RULING
1. Whether or not, the respondents are project- based employees.
ISSUE:
2. Does the CA erred in deciding against the petitioner
RULING:
1. YES. The Supreme Court found that the respondents are project- based
employees.

It was revealed in their contracts that they are adequately informed of their
employment status at least at the time they signed their employment contracts and no
indication that the respondents were coerced at the time that they signed the
contracts. The contracts were written in vernacular form stating uncertain terms that
they were hired as project- based and whose employment are coterminous with the
certain date.

The Supreme Court cited Article 280 (294) of the Labor Code wherein project- based
employees were distinguished as; 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 employees.

Thus, after meticulous examination of the contracts of employment by the Supreme

Court, it was revealed that the task assigned were distinct, separate and identifiable
from the other projects. Under each contract of the respondents, it was indicated the
positions they held, specific projects for which they were hired and, the duration or
expected completion of the projects.

2. YES, the supreme court found that CA erred in deciding against the
petitioner.

According to the supreme court, repeated hiring of project employees to different

projects does not ipso fact make them regular employees. The length of service
(through rehiring) is not a determining factor of the employment tenure. It was clear
that the nature of business of Herma Shipyard, Inc, that it does not engage in the
business of building ships for sale but merely accepts contracts for shipbuilding or for
repair of vessels from third parties