PROJECT EMPLOYEES

A project employee is one whose employment has been fixed for a specific
project or undertaking such that the completion or termination of which has
been determined at the time of the engagement of the employee.[15]
Due care should be observed in project employment. As stated earlier, a
project employee is considered a regular employee when the following
conditions concur: (a) there is a continuous rehiring of the project
employee event after the cessation of a project; and (b) the tasks
performed by the alleged project employees is vital, necessary, and
indispensable to the usual business or trade of the employer.[16]

HELD: Defendant was not liable; complainant was a project

employee.The principal test for determining whether a particular employee
is a project employee or a regular employee is whether the project
employee was assigned to carry out a specific project or undertaking, the
duration and scope of which were specified at the time the employee is
engaged for the project. Project may refer to a particular job or
undertaking that is within the regular or usual business of the employer, but
which is distinct and separate and identifiable as such from the
undertakings of the company. Such job or undertaking begins and ends at
determined or determinable times.
The complainant was a project employee. The specific projects for
which respondent was hired and the periods of employment were
specified in his employment contracts. The services he rendered, the
duration and scope of each employment are clear indications that
respondent was hired as a project employee.
While complainant was continuously rehired by Alcatel and he performed
tasks that were clearly vital, necessary and indispensable to the usual
business or trade of Alcatel, respondent was not continuously rehired
by Alcatel after the cessation of every project. Records show that
respondent was hired by Alcatel from 1988 to 1995 for three projects,
namely the PLDT X-5 project, the PLDT X-4 IOT project and the PLDT
1342 project. On 30 April 1988, upon the expiration of respondents
contract for the PLDT X-4 IOT project, Alcatel did not rehire respondent
until 1 February 1991, or after a lapse of 33 months, for the PLDT 1342
project. Alcatels continuous rehiring of respondent in various
capacities from February 1991 to December 1995 was done entirely
within the framework of one and the same project the PLDT 1342
project. This did not make [complainant] a regular employee of Alcatel as
respondent was not continuously rehired after the cessation of a
project. [Complainant] remained a project employee of Alcatel working on
the PLDT 1342 project.
The employment of a project employee ends on the date specified in
the employment contract. Therefore, respondent was not illegally
dismissed but his employment terminated upon the expiration of his
employment contract (Emphasis supplied.) [ACLATEL Philippines, Inc.
v. Relo, G.R. No. 164315, 03 July 2009]

Best Legal Practices:

Stipulate clearly the paramaters for project or fixed-period employment In
order to avoid doubts on the status of an employee, the employment
contract should clearly stipulate the terms and conditions for the project
employment. In particular, the project should be clearly specified.
Refrain from continuous rehiring of the same project employee While
project employment is valid, a continuous rehiring of the same project
employee who performs work that is vital, necessary and indispensable to
the usual business or trade of the employer, may result in the latter
becoming a regular employee by operation of law.

D.M. Consunji, Inc. v. Jamin

G.R. No. 192514, 18 April 2012
Complainant Estelito L. Jamin initiated an illegal dismissal case against
defendant D.M. Consunji, Inc. Prior thereto, defendant repeatedly rehired
complainant as a carpenter for several projects. Complainant claimed that
he served the company for almost 31 years making him a regular
employee. In its defense, defendant claimed that complainant was hired on
a project-to-project basis.
HELD: The company was liable. Complainant was a regular employee. For
a period of 31 years, DMCI had repeatedly, continuously and successively
engaged Jamins services since he was hired on December 17, 1968 or for
a total of 38 times 35 as shown by the schedule of projects submitted by
DMCI to the labor arbiter and three more projects or engagements added
by Jamin, which he claimed DMCI intentionally did not include in its
schedule so as to make it appear that there were wide gaps in his
engagements.

Thus, while the contracts indeed show that Jamin had been engaged
as a project employee, there was an ALMOST UNBROKEN
STRING OF JAMINS REHIRING from December 17, 1968 up to the
termination of his employment on March 20, 1999. Moreover, ALL
THE 38 PROJECTS where DMCI engaged Jamins services, the tasks
he performed as a carpenter were indisputably necessary and
desirable in DMCIs construction business.
When a project ends so does the employment of a project employee. As
held in the Alcatel case, the termination of the project by which a project
employee was engaged does not result in illegal dismissal.[17]
With project employment, the issue usually raised in a labor dispute is often
whether a particular project or undertaking is valid. That is to say, may an
employer create a project or undertaking which is necessary to the
business or trade? As the law does not make any limitation on such a
project or undertaking, the employer may do so provided it is in compliance
with law on project employment and it is not done to circumvent the
employees security of tenure.

However, petitioners are of the position that the reinstatement of respondents to

their former positions, which were no longer existing, is impossible, highly unfair and
unjust. The project was already completed by petitioners on September 28, 2001. Thus
the completion of the project left them with no more work to do. Having completed their
tasks, their positions automatically ceased to exist. Consequently, there were no more
positions where they can be reinstated as painters.

Petitioners are misguided. They forgot that there are two types of employees in
the construction industry. The first is referred to as project employees or those
employed in connection with a particular construction project or phase thereof and such
employment is coterminous with each project or phase of the project to which they are
assigned. The second is known as non-project employees or those employed without
reference to any particular construction project or phase of a project.

The second category is where respondents are classified. As such they are
regular employees of petitioners. It is clear from the records of the case that when one
project is completed, respondents were automatically transferred to the next
project awarded to petitioners. There was no employment agreement given to
respondents which clearly spelled out the duration of their employment, the specific
work to be performed and that such is made clear to them at the time of hiring. It is
now too late for petitioners to claim that respondents are project employees whose
employment is coterminous with each project or phase of the project to which they are
assigned.

Nonetheless, assuming that respondents were initially hired as project employees,

petitioners must be reminded of our ruling in Maraguinot, Jr. v. National Labor
Relations Commission[28] that [a] project employee x x x may acquire the status of a
regular employee when the following [factors] concur:

1. There is a continuous rehiring of project employees even after cessation of a

project; and

2. The tasks performed by the alleged project employee are vital, necessary and
indespensable to the usual business or trade of the employer.

In this case, the evidence on record shows that respondents were employed and
assigned continuously to the various projects of petitioners. As painters, they performed
activities which were necessary and desirable in the usual business of petitioners, who are
engaged in subcontracting jobs for painting of residential units, condominium and
commercial buildings. As regular employees, respondents are entitled to be reinstated
without loss of seniority rights.
 G.R. No. 200857, October 22, 2014

Also, the respondents had already been working for the

petitioner as early as 1998. Even before the service contract
with Robinsons, the respondents were already under the
petitioner's employ.26They had been doing the same type
of work and occupying the same positions from the time
they were hired and until they were dismissed in January
2009. The petitioner did not present any evidence to refute
the respondents' claim that from the time of their hiring
until the time of their dismissal, there was NO GAP in
between the projects where they were assigned to. The
petitioner continuously availed of their services by constantly
deploying them to its clients.

Lastly, under Department Order (DO) 18-02,27 the applicable

labor issuance to the petitioner's case, the contractor or
subcontractor is considered as the employer of the
contractual employee for purposes of enforcing the
provisions of the Labor Code and other social legislation.28

DO 18-02 grants contractual employees all the rights and

privileges due a regular employee, including the following: (a)
safe and healthful working conditions; (b) labor standards
such as service incentive leave, rest days, overtime pay,
holiday pay, 13th month pay and separation pay; (c) social
security and welfare benefits; (d) self-organization, collective
bargaining and peaceful concerted action; and (e) security of
tenure.29

In this light, we thus conclude that although the respondents

were assigned as contractual employees to the petitioner's
various clients, under the law, they remain to be the
petitioner's regular employees, who are entitled to all the
rights and benefits of regular employment.

The respondents' employment

contracts, which were belatedly
signed, are voidable.

the records show that at the time of the respondents' dismissal,

they had already been continuously working for the petitioner for
more than a year. Despite this, they never signed any
employment contracts with the petitioner, except the
contracts they belatedly signed when the petitioner's own
contract of janitorial services with Robinsons neared
expiration.

As already discussed, for an employee to be validly categorized

as a project employee, it is necessary that the specific
project or undertaking had been identified and its period
and completion date determined and made known to the
employee at the time of his engagement. This provision
ensures that the employee is completely apprised of the terms of
his hiring and the corresponding rights and obligations arising
from his undertaking. Notably, the petitioner's service contract
with Robinsons was from January 1 to December 31, 2008. The
respondents were only asked to sign their employment contracts
for their deployment with Robinsons halfway through 2008, when
the petitioner's service contract was about to expire.

We find the timing of the execution of the respondents'

respective employment contracts to be indicative of the
petitioner's calculated plan to evade the respondents' right
to security of tenure, to ensure their easy dismissal as soon as
the Robinsons' contract expired. The attendant circumstances
cannot but raise doubts as to the petitioner's good faith.
If the petitioner really intended the respondents to be
project employees, then the contracts should have been
executed right from the time of hiring, or when the
respondents were first assigned to Robinsons, not when
the petitioner's service contract was winding up. The terms
and conditions of the respondents' engagement should have been
disclosed and explained to them from the commencement of their
employment. The petitioner's failure to do so supports the
conclusion that it had been in bad faith in evading the
respondents' right to security of tenure.

In Glory Philippines, Inc. v. Vergara,30 the Court rejected the

validity of a fixed term contract belatedly executed, and ruled
that its belated signing was a deliberate employer ploy to evade
the employees' right to security of tenure. As the Court
explained:ChanRoblesVirtualawlibrary

To us, the private respondent's illegal intention became clearer

from such acts. Its making the petitioners sign written
employment contracts a few days before the purported
end of their employment periods (as stated in such
contracts) was a diaphanous ploy to set periods with a
view for their possible severance from employment should
the private respondent so willed it. If the term of the
employment was truly determined at the beginning of the
employment, why was there delay in the signing of the
ready-made contracts that were entirely prepared by the
employer? Also, the changes in the positions supposedly held by
the petitioners in the company belied the private respondent's
adamant contention that the petitioners were hired solely for the
purpose of manning PIS during its alleged dry run period that
ended on October 20, 1998. We view such situation as a very
obvious ploy of the private respondent to evade the petitioner's
eventual regularization.31 [Emphasis ours]
Moreover, under Article 1390 of the Civil Code, contracts where
the consent of a party was vitiated by mistake, violence,
intimidation, undue influence or fraud, are voidable or
annullable. The petitioner's threat of nonpayment of the
respondents' salaries clearly amounted to intimidation. Under this
situation, and the suspect timing when these contracts were
executed, we rule that these employment contracts were voidable
and were effectively questioned when the respondents filed their
illegal dismissal complaint.

Having already determined that the respondents are regular

employees and not project employees, and that the respondents'
belated employment contracts could not be given any binding
effect for being signed under duress, we hold that illegal dismissal
took place when the petitioner failed to comply with the
substantive and procedural due process requirements of the law.

The petitioner also asserts that the respondents' subsequent

absorption by Robinsons' new contractors - Fieldmen
Janitorial Service Corporation and Altaserv - negates their
illegal dismissal. This reasoning is patently erroneous. The
charge of illegal dismissal was made only against the
petitioner which is a separate juridical entity from
Robinsons' new contractors; it cannot escape liability by
riding on the goodwill of others.

By law, the petitioner must bear the legal consequences of

its violation of the respondents' right to security of tenure.
The facts of this case show that since the respondents' hiring,
they had been under the petitioner's employ as janitors, service
crews and sanitation aides. Their services had been
continuously provided to the petitioner without any gap.
Notably, the petitioner never refuted this allegation of the
respondents. Further, there was no allegation that the
petitioner went out of business after the non-renewal of
the Robinsons' service contract. Thus, had it not been for the
respondents' dismissal, they would have been deployed to the
petitioner's other existing clients.

Liganza vs. RBL Shipyard, G.R. No. 159862, October 17,

2006
ISSUE: The issue boils down to whether petitioner is a project employee
and whether his termination was illegal.

The petition must be granted.

A project employee is 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 season."[11] Before an employee hired on a per project basis can
be dismissed, a report must be made to the nearest employment office of the
termination of the services of the workers every time it completed a project,
pursuant to Policy Instruction No. 20.[12]

Petitioner claims he is a regular employee since he worked for respondent

continuously and without interruption from 13 August 1991 up to 30 October
1999 and that his work as a carpenter was necessary and desirable to the
latters usual business of shipbuilding and repair. He asserts that when he was
hired by respondent in 1991, there was no employment contract fixing a definite
period or duration of his engagement, and save for the contract covering the
period 20 September 1999 to 19 March 2000, respondent had been unable to
show the other project employment contracts ever since petitioner started
working for the company. Furthermore, respondent failed to file as many
termination reports as there are completed projects involving petitioner, he
adds.

On the other hand, respondent insists that petitioner is a project employee as

evidenced by the project employment contracts it signed with him and employee
termination reports it submitted to the DOLE.

In finding that petitioner was a project employee, both the NLRC and the
Court of Appeals relied greatly on the aforementioned contracts. While
administrative findings of fact are accorded great respect and even finality when
supported by substantial evidence, nevertheless, when it can be shown that
administrative bodies grossly misappreciated evidence of such nature as to compel
a contrary conclusion, this Court will not hesitate to reverse their factual
findings.[13]

While the appropriate evidence to show that a person is a project employee

is the employment contract specifying the project and the duration of such project,
the existence of such contract is not always conclusive of the nature of ones
employment. In the instant case, respondent seeks to prove the status of petitioners
employment through four (4) employment contracts covering a period of only two
(2) years to declare petitioner as a project employee.

All that respondent submitted were four (4) contracts covering the
periods 29 July 1997 to 28 January 1998, 24 August 1998to 25 February 1999, 3
March 1999 to 2 September 1999, and 20 September 1999 to 19 March 2000, as
well as the employment termination reports for January 1998, August 1998,
February 1999 and October 1999.[14] Respondent failed to present the
contracts purportedly covering petitioners employment from 1991 to July
1997, spanning six (6) years of the total eight (8) years of his employment. To
explain its failure in this regard, respondent claims that the records and contracts
covering said period were destroyed by rains and flashfloods that hit the companys
office.[15] We are not convinced.
 To begin with, respondent has been unable to refute petitioners
allegation that he did not sign any contract when he started working for the
company. The four employment contracts are not sufficient to reach the
conclusion that petitioner was, and has been, a project employee earlier since
1991. The Court is not satisfied with the explanation that the other employment
contracts were destroyed by floods and rains. Respondent could have used other
evidence to prove project employment, but it did not do so, seemingly content
with the convenient excuse of destroyed documents.

The Court takes exception to the Court of Appeals finding that after every
completion of the project, petitioner was free to seek other employments outside
the private respondents company.[16] This conclusion is not supported by the
record. As respondent has affirmed, it executes three (3)-month or six (6)- month
contracts with its so-called project employees.[17] Except for respondents claim
that petitioner and its other project employees are free to seek work after
the termination of their contracts, no other proof was shown to this effect. In
fact, from the very scant record of petitioners employment, it may be inferred
that the contracts entered into by petitioner could not have been spaced so far
apart as to allow petitioner seek lucrative employment elsewhere. For example,
there was an interval of only four (4) days between petitioners contracts for the
periods 24 August 1998 to 25 February 1999 and 3 March 1999 to 2 September
1999, and only 17 days between the contracts for 3 March 1999 to 2 September
1999 and 20 September 1999 to 19 March 2000. Thus, from these facts alone, it
would be difficult to conclude that petitioner indeed was allowed to seek other
employment in between contracts.

Even assuming that petitioner is a project employee, respondent failed to

prove that his termination was for a just and valid cause. While it is true that the
employment contract states that the contract ends upon a specific date, or
upon completion of the project, respondent failed to prove that the last project
was indeed completed so as to justify petitioners termination from
employment.

In termination cases, the burden of proof rests on the employer to show

that the dismissal is for a just cause.[18] Thus, employers who hire project
employees are mandated to state and, once its veracity is challenged, to prove
the actual basis for the latters dismissal.[19] Respondent could have easily
proved that the project or phase for which petitioner was hired has already
been completed. A certificate from the owner of the vessel serviced by the
company, pictures perhaps, of the work accomplished, and other proof of
completion could have been procured by respondent. However, all that we have is
respondents self-serving assertion that the project has been completed.

This Court has held that an employment ceases to be co-terminous with

specific projects when the employee is continuously rehired due to the
demands of employers business and re-engaged for many more projects
without interruption.[20] In Maraguinot, Jr. v. NLRC (Second Division),[21] the
Court ruled that 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.[22]

Contrary to the Court of Appeals observation,[23] the situation obtaining in

this case is not at all in pari materia with that of Sandoval Shipyards, Inc. v.
NLRC. [24] In the cited case, a company engaged in the building and repair of
vessels hired welders, helpers and construction workers to work in the repair or
construction of a specified vessel. Upon completion of only one particular project,
several workers were terminated from work, and the termination was reported to
the then Ministry of Labor and Employment. The employees filed complaints for
illegal dismissal. This Court found the complaining employees to be
projectemployees whose work were co-terminous with the project for which they
were hired.

As in Sandoval, respondent is an establishment engaged in the repair,

rebuilding and/or renovation of cargo and fishing vessels, including the component
activities of carpentry, welding, painting, civil and nautical engineering works and
refrigeration as well as repair and reconditioning power installations and
improvement of electrical services and facilities in the vessel.[25]Petitioner, as
carpenter, was tasked to make and repair cabinet, flooring, quarters, ceiling,
windows, doors, kitchen and other parts of the vessel that needs to be
repaired.[26] As such, petitioners work was necessary or desirable to respondents
business. However, unlike in Sandoval where the complaining employees were
hired for only one project lasting for three (3) months at most, petitioner in this
case was employed by respondent continuously from 1991 to 1999. Assuming,
without granting that petitioner was initially hired for specific projects or
undertakings, the repeated re-hiring and continuing need for his services for
over eight (8) years have undeniably made him a regular employee.

Respondent capitalizes on our ruling in D.M. Consunji, Inc. v.

NLRC[27] which reiterates the rule 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.[28]

Surely, length of time is not the controlling test for project

employment. Nevertheless, it is vital in determining if the employee was hired
for a specific undertaking or tasked to perform functions vital, necessary and
indispensable to the usual business or trade of the employer.[29] Here,
respondent had been a project employee several times over. His employment
ceased to be coterminous with specific projects when he was repeatedly re-hired
due to the demands of petitioners business. Where from the circumstances it is
apparent that periods have been imposed to preclude the acquisition of
tenurial security by the employee, they should be struck down as contrary to
public policy, morals, good customs or public order.[30]
The Court observes that respondent has changed its defense twice during the
lifetime of this case. In the earlier stages of the proceedings before the NLRC,
respondent claimed that petitioner was separated from work because of project
completion.However, in the Court of Appeals, it claimed that petitioner was not
terminated from work, but that he in fact resigned from the company. [31] In the
present proceedings before this Court, respondent discarded the defense of
resignation and re-used the defense of project completion. Whatever the truth may
be, this unabashed vacillation only shows that respondent does not have a
strong defense on its side and that respondent itself is not sure of its position
on the issue of illegal dismissal.
 All considered, there are serious doubts in the evidence on record that
petitioner is a project employee, or that he was terminated for just cause. These
doubts shall be resolved in favor of petitioner, in line with the policy of the law
to afford protection to labor and construe doubts in favor of labor.

It is well-settled that the employer must affirmatively show rationally

adequate evidence that the dismissal was for a justifiable cause.[32] When there is
no showing of a 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 or
authorized cause.[33] For failure to prove otherwise, the Court has no recourse but
to grant the petition.

Finally, the Court reiterates that:

At this time, we wish to allay any fears that this decision unduly
burdens an employer by imposing a duty to re-hire a project employee
even after completion of the project for which he was hired. The import
of this decision is not to impose a positive and sweeping obligation upon
the employer to re-hire project employees. What this decision merely
accomplishes is a judicial recognition of the employment status of a
project or work pool employee in accordance with what is fait
accompli, i.e., the continuous re-hiring by the employer of project or
work pool employees who perform tasks necessary or desirable to
the employers usual business or trade. x x x [34]
Dacuital, et al vs. L.M. Camus Engineering, G.R. No.
176748, September 1, 2010

The PRINCIPAL TEST used to determine whether employees are project

employees is whether or not the employees were assigned to carry out a
specific project or undertaking, the duration or scope of which was specified
at the time the employees were engaged for that project.[40]

Admittedly, respondents did not present the employment contracts of

petitioners except that of Dacuital. They explained that it was no longer necessary
to present the other contracts since petitioners were similarly situated. Having
presented one contract, respondents believed that they sufficiently established
petitioners status as project employees.

Even though the absence of a written contract does not by itself grant
regular status to petitioners, such a contract is evidence that petitioners were
informed of the duration and scope of their work and their status as project
employees.[41] In this case, where no other evidence was offered, the absence of
the employment contracts raises a serious question of whether the employees
were properly informed at the onset of their employment of their status as
project employees.[42]

While it is true that respondents presented the employment contract of

Dacuital, the contract does not show that he was informed of the nature, as
well as the duration of his employment. In fact, the duration of the project for
which he was allegedly hired was not specified in the contract. The pertinent
provision thereof is quoted hereunder for easy reference:

3. In accordance with Policy No. 20 of the Labor Code of the

Philippines, parties agree that the effective date of this employment is 4-
5-00 up to the duration of the
DUCTWORK/ELECTRICAL/MECHANICAL phase of the project
estimated to be finished in the month of _______, 19______ or earlier.[43]
Even if we assume that under the above provision of the contract, Dacuital was
informed of the nature of his employment and the duration of the project, that
same contract is not sufficient evidence to show that the other employees were
so informed. It is undisputed that petitioners had individual employment contracts,
yet respondents opted not to present them on the lame excuse that they were
similarly situated as Dacuital. The non-presentation of these contracts gives rise
to the presumption that the employees were not informed of the nature and
duration of their employment. It is doctrinally entrenched that in illegal dismissal
cases, the employer has the burden of proving with clear, accurate, consistent, and
convincing evidence that the dismissal was valid. Absent any other proof that the
project employees were informed of their status as such, it will be presumed that
they are regular employees.[44]

Moreover, Department Order No. 19 (as well as the old Policy Instructions
No. 20) requires employers to submit a report of an employees termination to the
nearest public employment office everytime the employment is terminated due to
the completion of a project.[45] In this case, there was no evidence that there was
indeed such a report. LMCECs failure to file termination reports upon the
cessation of petitioners employment was an indication that petitioners were
not project but regular employees.

Well-established is the rule that regular employees enjoy security of tenure and
they can only be dismissed for just or valid cause and upon compliance with due
process, i.e., after notice and hearing. In cases involving an employees dismissal,
the burden is on the employer to prove that the dismissal was legal. [46] This burden
was not amply discharged by LMCEC in this case. Being regular employees,
petitioners were entitled to security of tenure, and their services may not be
terminated except for causes provided by law.[47]

Jeanette V. Manalo, et. al. vs. TNS Philippines Inc.,

et. al., G.R. No. 208567, November 26, 2014).
Aggrieved, petitioners filed an appeal before the NLRC.
Consequently, the NLRC rendered its judgment17in favor of
petitioners and reversed the LA ruling.
Thus:chanRoblesvirtualLawlibrary

We note that, initially, complainants used to be

project employees as shown by the samples of
project-to-project employment contracts, project
clearance slips, and the establishment
termination reports adduced in evidence.

Case records, however, show that the last time

respondent company filed an establishment
termination report was in November 2007
indicating project completion on November 30,
2007. What is clear though is that complainants
were allowed to continue working after
November 30, 2007. Respondent company did not
adduce in evidence employment
contracts relating to the latest employment of the
complainants. In the absence of proof that the
subsequent employment of the complainants
continued to be on a project-to-project basis
under a contract of employment, complainants
are considered to have become regular
employees after November 30, 2007. The failure
to present contract of project employment means
that the employees are regular.18chanrobleslaw

[Emphases supplied]
The NLRC further ruled that, being regular employees, petitioners
were illegally dismissed because TNS, who had the burden of
proving legality in dismissal cases, failed to show how and
why the employment of petitioners was terminated on
October 21, 2008.19 Thus, the NLRC set aside the LA decision
and held TNS liable for illegal dismissal, ordering the latter to pay
petitioners their respective backwages and separation
pay. chanrobleslaw
20

Upon review of the records, the evidence failed to clearly,

accurately, consistently, and convincingly show that petitioners
were still project employees of TNS.

Article 280 of the Labor Code, as amended, clearly defined a

project employee as 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 season. Additionally, a project employee is
one whose termination of his employment contract is reported to
the DOLE everytime the project for which he was engaged has
been completed.

In their Comment,26 the respondents stressed that the NLRC

decision was mainly anchored upon the supposed lack of
compliance with the termination report requirement under the
applicable DOLE Department Orders. The NLRC ruled that
petitioners were regular employees for having been allowed to
continue working after the last submitted termination report.
Thus, TNS submitted, albeit belatedly, the termination reports
from November 2007 up to the last termination report filed on
November 18, 2008, by attaching it to the motion for
reconsideration filed before the NLRC.27chanrobleslaw

Although TNS belatedly submitted the supposed lacking

termination reports, it failed to show the corresponding
project employment contracts of petitioners covering the
period indicated in the said termination reports. TNS itself
stated in its motion for reconsideration28 before the NLRC that the
project employee status of the employee could be proved by the
employment contracts signed voluntarily by the employees and
by the termination report filed with the DOLE after the completion
of every project.29Yet, no project employment contracts were
shown. It is well-settled that rules of evidence shall be liberally
applied in labor cases, but this does not detract from the principle
that piecemeal presentation of evidence is simply not in
accord with orderly justice.30The NLRC was correct in saying
that in the absence of proof that the subsequent employment of
petitioners continued to be on a project-to-project basis under a
contract of employment, petitioners were considered to have
become regular employees.31chanrobleslaw

In Maraguinot, Jr. v. NLRC,33 the Court held that 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.

Although it is true that the length of time of the employees

service is not a controlling determinant of project employment, it
is vital in determining whether he was hired for a specific
undertaking or in fact tasked to perform functions vital, necessary
and indispensable to the usual business or trade of the
employer.34 Petitioners successive re-engagement in order to
perform the same kind of work firmly manifested the necessity
and desirability of their work in the usual business of TNS as a
market research facility.35 Undisputed also is the fact that the
petitioners were assigned office-based tasks from 9:00 oclock in
the morning up to 6:00 oclock in the evening, at the earliest,
without any corresponding remuneration.
The project employment scheme used by TNS easily
circumvented the law and precluded its employees from
attaining regular employment status in the subtlest way
possible. Petitioners were rehired not intermittently, but
continuously, contract after contract, month after month,
involving the very same tasks. They practically performed exactly
the same functions over several years. Ultimately, without a
doubt, the functions they performed were indeed vital and
necessary to the very business or trade of TNS.

Granting arguendo that petitioners were rehired intermittently, a

careful review of the project employment contracts of petitioners
reveals some other vague provisions. Oddly, one of the terms and
conditions in the said contract stated
that:chanRoblesvirtualLawlibrary

1. The need for your services being determinable and for a

specific project starting ____________ your employment
will be for the duration of said project of the Company,
namely Project ___________ which is expected to be
finished on _____________. The Company shall have the
option of renewing or extending the period of this
agreement for such time as it may be necessary to
complete the project or because we need further time
to determine your competence on the job.

To the Court, the phrase because we need further time to

determine your competence on the job would refer to a
probationary employment. Such phrase changes the tenor of the
contract and runs counter to the very nature of a project
employment. TNS can, therefore, extend the contract which was
already fixed when it deemed it necessary to determine whether
or not the employee was qualified and fit for the job. Corollarily,
TNS can likewise pre-terminate the contract not because the
specific project was completed ahead of time, but because of
failure to qualify for the job. Consistently, the terms and
conditions of the contract, reads:chanRoblesvirtualLawlibrary

4. It is expressly agreed and understood that the Company may

terminate your employment after compliance with procedural
requirements of law, without benefit of termination pay and
without any obligation on the part of the Company, in the event
of any breach of any conditions hereof:
a) If the project is completed or cancelled before the expected
date of completion as specified in paragraph 1 hereof;
b) If we should find that you are not qualified, competent
or efficient in the above-stated positions for which you
are hired in accordance with the company standards
made known to you at the start of your employment;
xxx

For said reason, at the outset, the supposed project employment

contract was highly doubtful. In determining the true nature
of an employment, the entirety of the contract, not merely
its designation or by which it was denominated, is
controlling. Though there is a rule that conflicting provisions in a
contract should be harmonized to give effect to all,36in this case,
however, harmonization is impossible because project
employment and probationary employment are distinct from one
another and cannot co-exist with each other. Hence, should there
be ambiguity in the provisions of the contract, the rule is that all
doubts, uncertainties, ambiguities and insufficiencies
should be resolved in favor of labor.37 This is in consonance
with the constitutional policy of providing full protection to labor.

In sum, petitioners are deemed to have become regular

employees. As such, the burden of proving the legality of their
dismissal rests upon TNS.Having failed to discharge such burden
of proving a just or authorized cause, TNS is liable for illegal
dismissal.
Accordingly, as correctly ruled by the NLRC, each petitioner is
entitled to backwages from the time of their dismissal up to the
finality of this decision plus separation pay, following their prayer
for such relief in lieu of reinstatement, computed as follows as of
May 29, 2009:chanRoblesvirtualLawlibrary

a) Backwages:
October 21, 2008 to May 29, 2009 = 7.27 mos.
P382.00 x 26 days x 7.27 mos. = P72, 205.64
b) Separation Pay:
December 1, 2008 to May 29, 2009 = 5.93 mos.
P382.00 x 26 days x 5.03 mps./12 = P4,908.10
P77,113.80
Finally, nowhere in the NLRC resolution denying TNS motion for
reconsideration can it be found it outrightly denied the said
motion for belatedly submitting the lacking termination reports.
In resolving the motion, the NLRC also took into consideration the
records of the case, meaning, including those belatedly
submitted, and despite review of these records, it still found the
evidence insufficient to overturn its decision against TNS.

To reiterate, the technical rules of evidence are not binding

on labor tribunals. Such a rule, however, is not a license for
parties to a case to be remiss in their duty to present every
and all proofs, at the earliest opportunity, that will best
support their claim and help the courts to fully, exhaustively and
speedily resolve the controversy.
 FILIPINAS PRE-FABRICATED BUILDING SYSTEMS (FILSYSTEMS),
INC., and FELIPE A. CRUZ JR., vs. ROGER D. PUENTE, G.R. No. 153832.
[1]

March 18, 2005]

First Issue:
Project Employee

With particular reference to the construction industry, to which Petitioner

Filsystems belongs, Department (of Labor and Employment) Order No.
19,[11] Series of 1993, states:

2.1 Classification of employees. The employees in the construction industry

are generally categorized as a) project employees and b) non-project
employees. Project employees are those employed in connection with a
particular construction project or phase thereof and whose employment is
co-terminous with each project or phase of the project to which they are
assigned.

xxxxxxxxx

2.2 Indicators of project employment. Either one or more of the following

circumstances, among other, may be considered as indicators that an
employee is a project employee.

(a) The duration of the specific/identified undertaking for which the worker
is engaged is reasonably determinable.

(b) Such duration, as well as the specific work/service to be performed,

is defined in an employment agreement and is made clear to the employee
at the time of hiring.

(c) The work/service performed by the employee is in connection with the

particular project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to
offer his services to any other employer.
(e) The termination of his employment in the particular project/undertaking
is reported to the Department of Labor and Employment (DOLE) Regional
Office having jurisdiction over the workplace within 30 days following the
date of his separation from work, using the prescribed form on
employees terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay

completion bonus to the project employee as practiced by most
construction companies.

In the present case, the contracts of employment of Puente attest to the

[13]

fact that he was hired for specific projects. His employment was coterminous
with the completion of the projects for which he had been hired. Those
contracts expressly provided that his tenure of employment depended on the
duration of any phase of the project or on the completion of the construction
projects. Furthermore, petitioners regularly submitted to the labor department
reports of the termination of services of project workers. Such compliance with
the reportorial requirement confirms that respondent was a project
employee. [14]

With regard specifically to the last employment contract executed by the

parties, a contract that respondent accepted on August 26, 1996, we find that
he worked at the site of the World Finance Plaza project. That he did is amply
proven by the Affidavit of Eduardo Briagas, another employee who was also
[15]

stationed at the World Finance Plaza project, as well as by respondents

Travel Trip Reports. [16]

Furthermore, respondents Complaint specified the address of

[17]

Filsystems, as 69 INDUSTRIA ROAD, B.BAYAN Q.C., but specified his place

of work as PROJECT TO PROJECT. These statements, coupled with the
other pieces of evidence presented by petitioners, convinces the Court that --
contrary to the subsequent claims of respondent -- he performed his work at
the project site, not at the companys premises.
That his employment contract does not mention particular dates that
establish the specific duration of the project does not preclude his
classification as a project employee. This fact is clear from the provisions of
Clause 3.3(a) of Department Order No. 19, which states:

a) Project employees whose aggregate period of continuous employment in a

construction company is at least one year shall be considered regular employees, in
the absence of a day certain agreed upon by the parties for the termination of their
relationship. Project employees who have become regular shall be entitled to
separation pay.

A day as used herein, is understood to be that which must necessarily come, although
is may not be known exactly when. This means that where the final completion of a
project or phase thereof is in fact determinable and the expected completion is made
known to the employee, such project employee may not be considered regular,
notwithstanding the one-year duration of employment in the project or phase thereof
or the one-year duration of two or more employments in the same project or phase of
the object. (Italicization and emphasis supplied)

Respondents employment contract provides as follows:

x x x employment, under this contract is good only for the duration of the project
unless employees services is terminated due to completion of the phase of
work/section of the project or piece of work to which employee is assigned:

We agree clearly that employment is on a Project to Project Basis and that upon
termination of services there is no separation pay:

POSITION : Mobil Crane Operator

PROJECT NAME : World Finance Plaza

LOCATION : Meralco Ave., Ortigas Center, Pasig City

ASSIGNMENT : Lifting & Hauling of Materials

(Phase of Work/Piece of Work) [18]

Evidently, although the employment contract did not state a particular

date, it did specify that the termination of the parties employment relationship
was to be on a day certain -- the day when the phase of work termed
Lifting & Hauling of Materials for the World Finance Plaza project would
be completed. Thus, respondent cannot be considered to have been a
regular employee. He was a project employee.
That he was employed with Petitioner Filsystems for ten years
in various projects did not ipso facto make him a regular employee,
considering that the definition of regular employment in Article 280 of the
Labor Code makes a specific exception with respect to project employment.
The mere rehiring of respondent on a project-to-project basis did not confer
upon him regular employment status. The practice was dictated by the
[19]
practical consideration that experienced construction workers are more
preferred. It did not change his status as a project employee.
[20]

Second Issue:
Reinstatement

In termination cases, the burden of proving that an employee has been

lawfully dismissed lies with the employer. Thus, employers who hire project
[21]

employees are mandated to state and, once its veracity is challenged, to

prove the actual basis for the latters dismissal. [22]

In the present case, petitioners claim that respondents services were

terminated due to the completion of the project. There is no allegation
[23]

or proof, however, that the World Finance Plaza project -- or the phase of
work therein to which respondent had been assigned -- was already
completed by October 1, 1999, the date when he was dismissed. The
inescapable presumption is that his services were terminated for no valid
cause prior to the expiration of the period of his employment; hence, the
termination was illegal. Reinstatement with full back wages, inclusive of
allowances and other benefits or their monetary equivalents -- computed
from the date of his dismissal until his reinstatement -- is thus in order. [24]

HOWEVER, if indeed the World Finance Plaza project has already

been completed during the pendency of this suit, then respondent -- being
a project employee -- can no longer be reinstated. Instead, he shall entitled
[25]

to the payment of his salary and other benefits corresponding to the

unexpired portion of his employment, specifically from the time of the
[26]

termination of his employment on October 1, 1999, until the date of the

completion of the World Finance Plaza project.
WHEREFORE, the Petition is PARTLY GRANTED. Respondent Roger D.
Puente is DECLARED to be a project employee, whose employment was
terminated without any valid cause prior to its expiration and is thus entitled to
reinstatement with full back wages. However, if reinstatement is no longer
possible due to the completion of the World Finance Plaza project during the
pendency of this case, Petitioner Filipinas Pre-Fabricated Building Systems
(Filsystems), Inc. is ORDERED to PAY respondent the equivalent of his
salaries and other employment benefits, computed from October 1, 1999,
until the date of the projects actual completion.
G.R. No. 81077 June 6, 1990

LUIS DE OCAMPO, JR., JOSE RODRIGO, EUGENIO ESQUEJO, VICTORINO TABERNERO,

RIZALO DALIVA, FRANCISCO ACOSTA and 87 others listed in Annex 'A' hereof, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MAKATI DEVELOPMENT
CORPORATION, respondents.

Coming now to the last question, we stress the rule in Cartagenas v.

Romago Electric Co., 5 that contract workers are not considered
regular employees, their services being needed only when there are
projects to be undertaken. 'The rationale of this rule is that if a project
has already been completed, it would be unjust to require the
employer to maintain them in the payroll while they are doing
absolutely nothing except waiting until another project is begun, if at
all. In effect, these stand-by workers would be enjoying the status of
privileged retainers, collecting payment for work not done, to be
disbursed by the employer from profits not earned. This is not fair by any
standard and can only lead to a coddling of labor at the expense of
management.

We believe, HOWEVER, that this rule is not applicable in the case at bar,
and for - good reason. The record shows that although the contracts of
the project workers had indeed expired, the project itself was still on-
going and so continued to require the workers' services for its
completion. 6 There is no showing that such services were
unsatisfactory to justify their termination. This is not even alleged by
the private respondent. One can therefore only wonder why, in view of
these circumstances, the contract workers were not retained to finish
the project they had begun and were still working on. This had been
done in past projects. This arrangement had consistently been followed
before, which accounts for the long years of service many of the workers
had with the MDC.

It is obvious that the real reason for the termination of their services-which,
to repeat, were still needed-was the complaint the project workers had filed
and their participation in the strike against the private respondent. These
were the acts that rendered them persona non grata to the management.
Their services were discontinued by the MDC not because of the
expiration of their contracts, which had not prevented their retention
or rehiring before as long as the project they were working on had not
yet been completed. The real purpose of the MDC was to retaliate
against the workers, to punish them for their defiance by replacing them
with more tractable employees.

Also noteworthy in this connection is Policy Instruction No. 20 of the

Department of Labor, providing that "project employees are not entitled to
separation 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
projects in which they had been employed by a particular construction
company." 7 Affirmatively put, and interpreting it in the most liberal way to
favor the working class, the rule would entitle project employees to
separation pay if the projects they are working on have not yet been
completed when their services are terminated. And this should be true
even if their contracts have expired, on the theory that such contracts
would have been renewed anyway because their services were still
needed.

Applying this rule, we hold that the project workers in the case at bar, who
were separated even before the completion of the project at the New
Alabang Village and not really for the reason that their contracts had
expired, are entitled to separation pay. We make this disposition instead of
ordering their reinstatement as it may be assumed that the said project has
been completed by this time. Considering the workers to have been
separated without valid cause, we shall compute their separation pay at
the rate of one month for every year of service of each dismissed
employee, up to the time of the completion of the project. 8 We feel this
is the most equitable way to treat their claim in light of their cavalier
dismissal by the private respondent despite their long period of satisfactory
service with it.

It is the policy of the Constitution to afford protection to labor in

recognition of its role in the improvement of our welfare and the
strengthening of our democracy. An exploited working class is a
discontented working class. It is a treadmill to progress and a threat
to freedom. Knowing this, we must exert all effort to dignify the lot of
the employee, elevating him to the same plane as his employer, that
they may better work together as equal partners in the quest for a
better life. This is a symbiotic relationship we must maintain if such a
quest is to succeed.

G.R. No. 209822 July 8, 2015

DIONISIO DACLES,* Petitioner,

vs.
MILLENIUM ERECTORS CORPORATION and/or RAGAS TIU, Respondents.

Moreover, if private respondents were indeed employed as "project employees,"

petitioners should have submitted a report of termination to the nearest public
employment office every time their employment was terminated due to
completion of each construction project. The records show that they did not.
Policy Instruction No. 20 is explicit that employers of project employees
are exempted from the clearance requirement but not from the submission
of termination report.1wphi1 We have consistently held that failure of the
employer to file termination reports after every project
completion proves that the employees are not project employees.
Nowhere in the New Labor Code is it provided that the reportorial requirement is
dispensed with. The fact is that Department Order No. 19 superseding Policy
Instruction No. 20 expressly provides that the report of termination is one of the
indicators of project employment. (Emphasis supplied)

G.R. No. 178505

Scrutinizing petitioners employment contracts with INNODATA, however,
failed to reveal any mention therein of what specific project or undertaking
petitioners were hired for. Although the contracts made general references to
a project, such project was neither named nor described at all therein. The
conclusion by the Court of Appeals that petitioners were hired for the Earthweb
project is not supported by any evidence on record. The one-year period for
which petitioners were hired was simply fixed in the employment contracts
without reference or connection to the period required for the completion of a
project. More importantly, there is also a dearth of evidence that such project
or undertaking had already been completed or terminated to justify the
dismissal of petitioners. In fact, petitioners alleged - and respondents failed to
dispute that petitioners did not work on just one project, but continuously worked
for a series of projects for various clients of INNODATA.

In Magcalas v. National Labor Relations Commission,[30] the Court struck

down a similar claim by the employer therein that the dismissed employees were
fixed-term and project employees. The Court here reiterates the rule that all
doubts, uncertainties, ambiguities and insufficiencies should be resolved in
favor of labor. It is a well-entrenched doctrine that in illegal dismissal cases, the
employer has the burden of proof. This burden was not discharged in the present
case.

First Issue: Are Petitioners Project Employees?

Indeed, an examination of the assailed Decision reveals that public

respondent failed to back up its conclusions with substantial evidence,
or that which a reasonable mind may accept as adequate to justify a
conclusion. This quantum of evidence is required to establish a fact in cases
before administrative and quasi-judicial bodies. [25]

Thus, a mere provision in the CBA recognizing contract employment

does not sufficiently establish that petitioners were ipso
facto contractual or project employees. In the same vein, the invocation
of Policy No. 20 governing the employment of project employees in the
construction industry does not, by itself, automatically classify private
respondent as part of the construction industry and entitle it to dismiss
petitioners at the end of each project. These facts cannot be presumed;
they must be supported by substantial evidence.
On the other hand, private respondent did not even allege, much less
did it seek to prove, that petitioners had been hired on a project-to-project
basis during the entire length of their employment. Rather, it merely
sought to establish that petitioners had been hired to install the air-
conditioning equipment at Asian Development Bank and Interbank and that
they were legally dismissed upon the conclusion of these projects.
 Private respondent did not even traverse, and public respondent did not
controvert, the labor arbiter's finding that petitioners were continuously
employed without interruption, from the date of their hiring up to the date of
their dismissal, in spite of the alleged completion of the so-called projects
in which they had been hired. The undisputed finding of the labor arbiter on
[26]

this continuous employment of petitioners is worth quoting: [27]

"(T)he record discloses that the complainants worked not only in one
special project, either at the Asian Development Bank or the Interbank
building, as the evidence of the respondent tends to prove, but also variably
in other projects/jobsites contracted by Koppel Incorporated: such as the
PNB on Roxas Boulevard, Manila; MIA now NAIA; PICC; and San Miguel
Complex on Ortigas Avenue, Pasig, Metro Manila. Some of them, after their
tour of duty on these different job-sites, were reassigned to the respondent's
plant at Koppel Compound, Para()aque, Metro Manila, as shown by the
individual complainants(') affidavits attached to their position paper. A close
examination of the record further reveals that the 'special projects' at the
Asian Development Bank and Interbank to which the complainants were last
assigned by the respondent were still in operation before their alleged
termination from employment. Under these factual milieu, we believe that
they had been engaged to work and perform activities which were necessary
and desirable in the air(-)conditioning and refrigeration installation/repair
business of the respondent employer, especially where, as in this case, the very
nature of such trade indicates that it can hardly fall under the exception of
Policy Instruction No. 20 which applies only to the construction industry. For
this reason, and considering that the facts narrated in the complainants(')
sworn statements were neither disputed nor refuted by contrary evidence
by the respondent, it becomes apparent and increasing(ly) clear that indeed
they would and ought to be classified as regular employees. x x x"
(Underscoring supplied.)
Petitioners were hired on different dates. Some of them worked for eight
(8) years, while others for only one and a half (1) years. Private respondent,
on the other hand, insisted that petitioners were hired on per project
basis. Private respondent, however, did not present any evidence to show the
termination of the employment contracts at the end of each project. Only
before public respondent and in this petition did private respondent allege,
through a photocopy of an affidavit of Mr. Jose Lecaros, the General
[28]

Manager of Koppel, Inc., that the Asian Development Bank and the Interbank
projects had been completed. This affidavit as well as the other
annexes cannot be given weight in this petition because this Court is not a
[29]

trier of facts. In any case, private respondent had not proved, by the said
affidavit, that the termination of each project had invariably resulted in the
dismissal of its alleged project employees.
Regular employees cannot at the same time be project
employees. Article 280 of the Labor Code states that regular employees are
those whose work is necessary or desirable to the usual business of the
employer. The two exceptions following the general description of regular
employees refer to either project or seasonal employees. It has been ruled in
the case of ALU-TUCP vs. National Labor Relations Commission that: [30]

"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 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 (should be distinct) 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." (Underscoring supplied).
The employment of seasonal employees, on the other hand, legally ends
upon completion of the project or the season, thus: [31]

"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."
In terms of terminating employment, this Court has already distinguished
project from regular employees, to wit: [32]

"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. Regular
[33]

employees, in contrast, 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." [34]

The overwhelming fact of petitioners' continuous employment as found by

the labor arbiter ineludibly shows that the petitioners were regular
employees. On the other hand, we find that substantial evidence, applicable
laws and jurisprudence do not support the ruling in the assailed Decision that
petitioners were project employees. The Court here reiterates the rule that all
doubts, uncertainties, ambiguities and insufficiencies should be resolved in
favor of labor. It is a well-entrenched doctrine that in illegal dismissal cases,
the employer has the burden of proof. This burden was not discharged in the
present case.