Malicdem v. Marulas Industrial Corp., G.R. No. 204406, Feb.

26, 2014
FACTS:

Petitioners Malicdem and Flores were hired by respondent corporation as

extruder operators in 2006 They were responsible for the bagging of filament
yarn, the quality of pp yarn package and the cleanliness of the work place area.
Their employment contracts were for a period of one (1) year. Every year
thereafter, they would sign a Resignation/Quitclaim in favor of Marulas a day
after their contracts ended, and then sign another contract for one (1) year until
such time that they were told not to report to work anymore. They were asked to
sign a paper acknowledging the completion of their contractual status. Claiming
that they were illegally dismissed, the corporation countered that their contracts
showed that they were fixedterm employees for a specific undertaking which was
to work on a particular order of a customer for a specific period. Their severance
from employment then was due to the expiration of their contracts.
ISSUE: Whether or not petitioners were illegally dismissed
HELD: Yes. CA affirming NLRC decision annulled and set aside

Labor Law: Effect of continuous re-hiring of a project employee for

the same tasks that are vital, necessary and indispensable to the usual
trade or business of the employer
Once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for the same tasks or nature of
tasks; and (2) these tasks are vital, necessary and indispensable to the usual
business or trade of the employer, then the employee must be deemed a regular
employee, pursuant to Article 280 of the Labor Code and jurisprudence. To rule
otherwise would allow circumvention of labor laws in industries not falling within
the ambit of Policy Instruction No. 20/Department Order No. 19, hence allowing
the prevention of acquisition of tenurial security by project or work pool
employees who have already gained the status of regular employees by the
employers conduct.
The test to determine whether employment is regular or not is the reasonable
connection between the particular activity performed by the employee in relation
to the usual business or trade of the employer. If the employee has been
performing the job for at least one year, even if the performance is not continuous
or merely intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability of that
activity to the business.

It is clear then that there was deliberate intent on the part of the employer to
prevent the regularization of petitioners. To begin with, there is no actual project.
The only stipulations in the contracts were the dates of their effectivity, the duties
and responsibilities of the petitioners as extruder operators, the rights and
obligations of the parties, and the petitioners compensation and allowances. As
there was no specific project or undertaking to speak of, the respondents cannot
invoke the exception in Article 280 of the Labor Code.This is a clear attempt to
frustrate the regularization of the petitioners and to circumvent the law.
Even granting that petitioners were project employees, they can still be
considered as regular as they were continuously hired by the same employer for
the same position as extruder operators. Being responsible for the operation of
machines that produced sacks, their work was vital and indispensable the
business of the employer.

The respondents cannot use the alleged expiration of the employment contracts
of the petitioners as a shield of their illegal acts. The project employment
contracts that the petitioners were made to sign every year since the start of their
employment were only a stratagem to violate their security of tenure in the
company.

The respondents invocation ofWilliam Uy Construction Corp. v. Trinidadis

misplaced because it is applicable only in cases involving the tenure of project
employees in the construction industry. It is widely known that in the
construction industry, a project employees work depends on the availability of
projects, necessarily the duration of his employment. It is not permanent but
coterminous with the work to which he is assigned.It would be extremely
burdensome for the employer, who depends on the availability of projects, to
carry him as a permanent employee and pay him wages even if there are no
projects for him to work on.The rationale behind this is that once the project is
completed it would be unjust to require the employer to maintain these
employees in their payroll.
Under Article 279 of the Labor Code, an employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement.