BUSTAMANTE ET AL VS.

NLRC DIGEST

FACTS: Respondent company is engaged in the business of producing high grade bananas in its
plantation in Davao del Norte. Petitioners Paulino Bantayan, Fernando Bustamante, Mario Sumonod and
Osmalik Bustamante were employed as laborers and harvesters while petitioner Sabu Lamaran was
employed as a laborer and sprayer in respondent companys plantation. All the petitioners signed
contracts of employment for a period of six (6) months from 2 January 1990 to 2 July 1990, but they had
started working sometime in September 1989. Previously, they were hired to do the same work for
periods lasting a month or more, from 1985 to 1989. Before the contracts of employment expired on 2
July 1990, petitioners employments were terminated on 25 June 1990 on the ground of poor performance
on account of age, as not one of them was allegedly below forty (40) years old.

Petitioners filed a complaint for illegal dismissal.

ISSUE: Whether or not private respondent exercises its power to terminate in good faith so as to make
the award of backwages improper in this case.

RULING: We do not sustain public respondents theory that private respondent should not be made to
compensate petitioners for backwages because its termination of their employment was not made in bad
faith. The act of hiring and re-hiring the petitioners over a period of time without considering them as
regular employees evidences bad faith on the part of private respondent. The public respondent made a
finding to this effect when it stated that the subsequent rehiring of petitioners on a probationary status
clearly appears to be a convenient subterfuge on the part of management to prevent complainants
(petitioners) from becoming regular employees.

In the case at bar, there is no valid cause for dismissal. The employees (petitioners) have not performed
any act to warrant termination of their employment. Consequently, petitioners are entitled to their
full backwages and other benefits from the time their compensation was withheld from them up to the
time of their actual reinstatement.
Lao vs NLRC
Facts: Private respondents were filed complaints for illegal dismissal against petitioners with NLRC.
Respondents were hired for various periods as construction workers in different capacities they described
in the terms. They alternately worked for Tomas Lao Corp., Tomas and James Developer, LVM
Construction, altogether as Lao Group of Companies. They engaged in construction of public roads and
bridges. Each one would also allow the utilization of the employees. With the arrangement workers were
transferred whenever necessary to on-going projects of the same company or rehired after thecompletion
of the project or project phase which they were assigned. In 1989 issued memorandum requiring all
workers and company personnel to sign employment contracts forms and clearances. To ensure
compliance with the directive, the company ordered the withholding of the salary of any employee who
refused to sign. All respondents refused to sign contending that this scheme was designed by their
employer to downgrade their status from their regular employees to mere project employees. Their
salaries were withheld. Since the workers stood firm in their refusal to comply with the directives their
services were terminated. The NLRC dismissed the complaint finding that respondents were project
employees whose employees could be terminated upon the completion of the project. However the
decision of LA was reversed on appeal finding that respondents were regular employees who were
dismissed without just cause and denied due process. The petitioners expostulation is that respondents
have no valid cause to complain about their employment contracts since documents formalized their
status as project employees. They cite Policy Instruction No. 20 of DOLE which defines project
employees as those employed in connection with particular construction project.
ISSUE: W/N dismissal of private respondents were illegal
RULING: The court ruled that, the principal test in determining whether particular employees are project
employees distinguished from regular employees is whether the project employees are assigned to
carryout specific project or undertaking, the duration of which are specified at the time of the employees
are engaged for the project. Project in the realm of industry and business refers to a particular job or
undertaking that it is within the regular or usual business of employer, but which is distinct and separate
and identifiable as such from the undertakings of the company. They allowed to workers hired for specific
projects and hence can be classified as project employees, the repeated re-hiring and the continuing need
for the services over a long span of time have undeniably made them regular employees. Length of time
may not be a controlling test for project employment, it can be a strong factor in determining whether the
employee was hired for a specific undertaking or in fact tasked to perform functions which are vital,
necessary and indispensable to the usual business or trade of the employer. In the case at bar, private
respondents had already gone through the status of project employees. But their employments became
non-coterminous with specific projects when they started to be continuously re-hired due to demands of
petitioners business and were re-engaged for many more projects without interruption. The denial by
petitioners of the existence of a work pool in the company because their projects were not continuous. A
work pool may exist although the workers in the pool do not receive salaries and are free to seek other
employment during temporary breaks in the business, provided that the worker shall be available when
called to report for a project. The court finds that the continuous re- hiring of the same set of employees
within the framework is strongly indicative that private respondents were an integral part of a work pool
in which petitioners drew its workers for its various projects.

ABESCO CONSTRUCTION AND DEVELOPMENT CORPORATION vs RAMIREZ

FACTS: Petitioner company was engaged in a construction business where respondents were hired on
different dates from 1976 to 1992 either as laborers, road roller operators, painters or drivers.

In 1997, respondents filed two separate complaints for illegal dismissal against the company and its
General Manager, Oscar Banzon, before the Labor Arbiter. Petitioners allegedly dismissed them without a
valid reason and without due process of law. The complaints also included claims for non-payment of the
13th month pay, five days service incentive leave pay, premium pay for holidays and rest days, and moral
and exemplary damages. The LA later on ordered the consolidation of the two complaints.

Petitioners denied liability to respondents and countered that respondents were project employees since
their services were necessary only when the company had projects to be completed. Petitioners argued
that, being project employees, respondents employment was coterminous with the project to which they
were assigned. They were not regular employees who enjoyed security of tenure and entitlement to
separation pay upon termination from work.

ISSUE: Whether respondents were project employees or regular employees.

HELD: The SC held that respondents were regular employees. The principal test for determining whether
employees are project employees or regular employees is whether they are assigned to carry out a
specific project or undertaking, the duration and scope of which are specified at the time they are engaged
for that project. Such duration, as well as the particular work/service to be performed, is defined in an
employment agreement and is made clear to the employees at the time of hiring.

In this case, petitioners did not have that kind of agreement with respondents. Neither did they inform
respondents of the nature of the latters work at the time of hiring. Hence, for failure of petitioners to
substantiate their claim that respondents were project employees, we are constrained to declare them as
regular employees.

Petition is denied.

PASOS vs PNCC
FACTS:

Roy D. Pasos worked on several projects for Philippine National Construction Corporation on April 26,
1996 which should end on July 25, 1996 instead it was extended for up to 2 more years until August
1998. He was then rehired on November 1998 which was then continuously being extended until October
19, 2000. He was then asked to report to his superior for another reemployment. For purposes of
reemployment he went under medical examination which revealed he had a pneumonitis and advised to
take a 14day sick leave. After the sick leave he had another medical examination that revealed he had a
Tuberculosis and to take a 60 day leave of absence. Petitioner claimed that after he presented his medical
clearance to the Project Personnel Officer he was informed that his services were already terminated. This prompted
petitioner to file a case of illegal dismissal.

ISSUE:

Whether or not employers failure to file termination reports after every project completion constitutes the
regularity of the project employee.

RULING: Yes. Duration of project employment should be determined at the time of hiring. While for firs
t three months, petitioner can be considered a project employee of PNCC, his employment thereafter, whe
n his services were extended without any specification of as to the duration, made him a regular employee
of PNCC. And his status as a regular employee was not affected by the fact that he was assigned to severa
l other projects and there were intervals in between said projects since he enjoys security of tenure.

Moreover, failure of an employer to file termination reports after every project completion proves that an
employee is not a project employee. Records clearly showed that PNCC did not report the termination of
petitioners supposed project employment for the NAIA II Project to the DOLE. Department Order No. 1
9, or the Guidelines Governing the Employment of Workers in the Construction Industry, requires empl
oyers to submit a report of an employees termination to the nearest public employment office every time
an employees employment is terminated due to a completion of a project. PNCC submitted as evidence o
f its compliance with the requirement supposed photocopies of its termination reports, each listing petitio
ner as among the employees affected. Unfortunately, none of the reports submitted pertain to the NAIA II
Project. Moreover, DOLE NCR verified that petitioner is not included in the list of affected workers base
d on the termination reports filed by PNCC. This certification from DOLE was not refuted by PNCC.

With regard his dismissal, a regular employee dismissed for a cause other than the just or authorized caus
es provided by law is illegally dismissed. Petitioners regular employment was terminated by PNCC due t
o contract expiration or project completion, which are both not among the just or authorized causes provid
ed in the Labor Code, as amended, for dismissing a regular employee. Thus, petitioner was illegally dismi
ssed and according to Article 279 of the Labor Code, he is entitled to reinstatement, full back wages, inclu
sive of allowances, and to his other benefits or their monetary equivalent from the time his compensation
was withheld from him up to the time of his actual reinstatement.

Macarthur Malicdem vs Marulas Industrial Corporation

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 of William Uy Construction Corp. v. Trinidad22is 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.
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Caramol vs. NLRC

Facts:
Petitioner Rogelio Caramol, a worker hired by respondent Atlantic Gulf and Pacific CO. of Manila, Inc.,
(ATLANTIC GULF), on a project to project basis and whose employment was renewed 44 times by the latter.
The petitioner claims he was not re-admitted by the latter after his involvement in a union strike, and now
seeks for the reversal of the decision of public respondent National Labor Relations Commission
(NLRC).The Labor Arbiter ruled that the respondent Atlantic Gulf is guilty of unfair labor practice,
declared illegal the constructive dismissal of the petitioner, and directed for the immediate reinstatement
of the petitioner with full backwages and without loss of seniority rights. However, public respondent
NLRC reversed the said decision and declared that the petitioner is a project employee. In consequence,
the petitioner asserts that NLRC has gravely abused its discretion and committed serious errors of law in
its decision.

Issue:
Whether or not the petitioner is a regular employee or a project employee ,and if he is entitled to payment
of full back wages

Held:
The Supreme Court affirmed the decision of the Labor Arbiter, and reversed that of NLRC. It found that
the successive contracts of employment where petitioner continued to perform the same kind of work as
rigger by way of a project-to-project contracts has precluded the acquisition of security of tenure by
petitioner and such repeated hiring and continuing need for his service is
sufficient evidence that his service is indispensable to the respondents business
or trade. Furthermore, the respondent failed to present any report of termination, required by Policy
Instruction No. 2 to be filed every time an employment is terminated due to completion of each
construction project. Thus, the petitioner is an employee of Atlantic Gulf, entitled to reinstatement and
full payment of backwages.