UNIVERSAL ROBINA CORPORATION vs CATAPANG

[G.R. No. 164736 October 14, 2005]

UNIVERSAL ROBINA CORPORATION and/or RANDY GREGORIO, Petitioners, vs. BENITO

CATAPANG, CARLOS ARARAO, ALVIN ALCANTARA, RESTY ALCORAN, REYNALDO
ARARAO, JUAN ARISTADO, LITO CABRERA, ONOFRE CASANO, BEN CERVAS, JOSEPH
CHUIDIAN, IRENEO COMENDADOR, ANGELITO CONCHADA, RICHARD CORONADO,
ELMER HILING, RAMON JOYOSA, JOSE LORIA, JR., VICTORIANO LORIA, RUEL MARIKIT,
RODERICK PANG-AO, QUIRINO PLATERO, PABLITO REDONDO, RAMIL ROXAS, RESTY
SALAZAR, NOEL TRINIDAD, FELICISIMO VARELA, BALTAZAR VILLANUEVA, ELPIDIO
VILLANUEVA, JOEL VILLANUEVA, JONATHAN VILLANUEVA, and JAIME VILLEGAS,
Respondents.

FACTS:
Petitioner Universal Robina Corporation is a corporation duly organized and existing under the
Philippine laws, while petitioner Randy Gregorio is the manager of the petitioner companys duck
farm in Calauan, Laguna. The individual respondents were hired by the petitioner company on
various dates from 1991 to 1993 to work at its duck farm in Barangay Sto. Tomas, Calauan,
Laguna. The respondents were hired under an employment contract which provided for a five-
month period. After the expiration of the said employment contracts, the petitioner company would
renew them and re-employ the respondents. This practice continued until sometime in 1996, when
the petitioners informed the respondents that they were no longer renewing their employment
contracts. When their contract was no longer renewed in 1996, respondents filed complaints for
illegal dismissal, reinstatement, backwages, damages and attorneys fees against URC.
Labor Arbiter ruled that Respondents are regular employees and were illegally dismissed. LA
ordered for their reinstatement. Several Writs of Execution were issued by the LA enforcing the
immediate reinstatement of the illegally dismissed respondents. URC was not able to fully comply
with the order because the section to which some of the respondents were assigned was
abolished.
Furthermore, NLRC affirmed the decision of the Labor Arbiter. Upon appeal, the CA ruled that
Respondents are regular employees after rendering more than one year of continuous service.
The 5-month contract is contrary to public policy for being used as a subterfuge to prevent the
respondents from becoming regular employees. URC should have included the respondents in
their payroll even if reinstatement cannot be accommodated. URC filed a motion for
reconsideration of the CA decision. CA denied the motion for being filed 2 days late.
ISSUE: Whether or not respondents are regular employees of petitioner corporation.

HELD: The SC held that the CA, the NLRC and the Labor Arbiter correctly categorized the
respondents as regular employees of the petitioner company. The primary standard 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 business or trade of the
employer. The connection can be determined by considering the nature of 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.

It is obvious that the said five-month contract of employment was used by petitioners as a
convenient subterfuge to prevent private respondents from becoming regular employees. Such
contractual arrangement should be struck down or disregarded as contrary to public policy or
morals. To uphold the same would, in effect, permit petitioners to avoid hiring permanent or
regular employees by simply hiring them on a temporary or casual basis, thereby violating the
employees security of tenure in their jobs. Petitioners act of repeatedly and continuously hiring
private respondents in a span of 3 to 5 years to do the same kind of work negates their contention
that private respondents were hired for a specific project or undertaking only.

[G.R. No. 114734. March 31, 2000]

VIVIAN Y. IMBUIDO, petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION, INTERNATIONAL INFORMATION SERVICES, INC. and
GABRIEL LIBRANDO,respondents.

Facts:
Petitioner was employed as a data encoder by private respondent International
Information Services, Inc., a domestic corporation engaged in the business of data
encoding and keypunching, from August 26, 1988 until October 18, 1991 when her
services were terminated. From August 26, 1988 until October 18, 1991, petitioner
entered into thirteen (13) separate employment contracts with private respondent, each
contract lasting only for a period of three (3) months.

In September 1991, petitioner and twelve (12) other employees of private respondent
allegedly agreed to the filing of a petition for certification election involving the rank-and-
file employees of private respondent.[3] Thus, on October 8, 1991, Lakas Manggagawa
sa Pilipinas (LAKAS) filed a petition for certification election with the Bureau of Labor
Relations (BLR), docketed as NCR-OD-M-9110-128.[4]

Subsequently, on October 18, 1991, petitioner received a termination letter from Edna
Kasilag, Administrative Officer of private respondent, allegedly "due to low volume of
work."[5]Thus, on May 25, 1992, petitioner filed a complaint for illegal dismissal with
prayer for service incentive leave pay and 13th month differential pay, with the National
Labor Relations Commission
Petitioner alleged that her employment was terminated not due to the alleged low
volume of work but because she "signed a petition for certification election among the
rank and file employees of respondents," thus charging private respondent with
committing unfair labor practices

On the other hand, private respondent, in its position paper filed on July 16, 1992,
maintained that it had valid reasons to terminate petitioners employment and
disclaimed any knowledge of the existence or formation of a union among its rank-and-
file employees at the time petitioners services were terminated.[8] Private respondent
stressed that its business "relies heavily on companies availing of its services. Its
retention by client companies with particular emphasis on data encoding is on a project
to project basis,"[9] usually lasting for a period of "two (2) to five (5) months." Private
respondent further argued that petitioners employment was for a "specific project with a
specified period of engagement.

In his decision, the labor arbiter found petitioner to be a regular employee, ruling that
even if herein complainant [petitioner herein] had been obstensively hired for a fixed
period or for a specific undertaking, she should be considered as a regular employee of
the respondents in conformity with the provisions laid down under Article 280 of the
Labor Code,"[14] after finding that "[i]t is crystal clear that herein complainant [petitioner
herein] performed a job which are (sic) usually necessary or desirable in the usual
business of respondent [s]."[15] The labor arbiter further denounced "the purpose
behind the series of contracts which respondents required complainant to execute as a
condition of employment was to evade the true intent and spirit of the labor laws for the
workingmen."[16] Furthermore, the labor arbiter concluded that petitioner was illegally
dismissed because the alleged reason for her termination, that is, low volume of work, is
"not among the just causes for termination recognized by law," [17] hence, he ordered her
immediate reinstatement without loss of seniority rights and with full backwages. With
regard to the service incentive leave pay, the labor arbiter decided "to grant the same
for failure of the respondents to fully controvert said claims."[18] Lastly, the labor arbiter
rejected petitioners claim for 13th month pay "since complainant [petitioner herein]
failed to fully substantiate and argued (sic) the same

On appeal, the NLRC reversed the decision of the labor arbiter. The NLRC held that
the complainant [petitioner herein], while hired as a regular worker, is statutorily
guaranteed, in her tenurial security, only up to the time the specific project for which she
was hired is completed."[23] Hence, the NLRC concluded that "[w]ith the specific project
"at RCBC 014" admittedly completed, the complainant [petitioner herein] has therefore
no valid basis in charging illegal dismissal for her concomittant (sic) dislocation

Issue: WON Vivian is a project employee.

Held: Yes. We agree with the findings of the NLRC that petitioner is a project employee. The
principal test for determining whether an 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 was engaged for that
project. 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. In the instant case, petitioner was engaged
to perform activities which were usually necessary or desirable in the usual business or trade of
the employer, as admittedly, petitioner worked as a data encoder for private respondent, a
corporation engaged in the business of data encoding and keypunching, and her employment
was fixed for a specific project or undertaking the completion or termination of which had been
determined at the time of her engagement, as may be observed from the series of employment
contracts between petitioner and private respondent, all of which contained a designation of the
specific job contract and a specific period of employment.

However, even as we concur with the NLRC's findings that petitioner is a project employee, we
have reached a different conclusion. In the recent case of Maraguinot, Jr. vs. NLRC, we held that
"[a] project employee or a member of a work pool may acquire the status of a regular employee
when the following concur:

1) There is a continuous rehiring of project employees even after [the] cessation of a

project; and

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

The evidence on record reveals that petitioner was employed by private respondent as a data
encoder, performing activities which are usually necessary or desirable in the usual business or
trade of her employer, continuously for a period of more than three (3) years, from August 26,
1988 to October 18, 1991 36 and contracted for a total of thirteen (13) successive projects. We
have previously ruled that "[h]owever, the length of time during which the employee was
continuously re-hired is not controlling, but merely serves as a badge of regular
employment." 37Based on the foregoing, we conclude that petitioner has attained the status of a
regular employee of private respondent.

The Court's ruling here is meant precisely to give life to the constitutional policy of strengthening
the labor sector, but, we stress, not at the expense of management. Lest it be misunderstood,
this ruling does not mean that simply because an employee is a project or work pool employee
even outside the construction industry, he is deemed, ipso jure, a regular employee. All that we
hold today is that once a project or work pool employee has been: (1) continuously, as opposed
to intermittently, re-hired 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. Policy 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 employer's conduct. 39 (emphasis
supplied)

Being a regular employee, petitioner is entitled to security of tenure and could only be dismissed
for a just or authorized cause, as provided in Article 279 of the Labor Code. The alleged causes
of petitioner's dismissal (low volume of work and belatedly, completion of project) are not valid
causes for dismissal under Articles 282 and 283 of the Labor Code. Thus, petitioner is entitled to
reinstatement without loss of seniority rights and other privileges, and to her full backwages,
inclusive of allowances, and to her other benefits or their monetary equivalent computed from the
time her compensation was withheld from her up to the time of her actual reinstatement. However,
complying with the principles of "suspension of work" and "no work, no pay" between the end of
one project and the start of a new one, in computing petitioner's backwages, the amounts
corresponding to what could have been earned during the periods from the date petitioner was
dismissed until her reinstatement when private respondent was not undertaking any project,
should be deducted.

G.R. No. L-65689 May 31, 1985

SANDOVAL SHIPYARDS, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, ROGELIO DIAMANTE, MANUEL PACRES,
ROLANDO CERVALES, DIONISIO CERVALES and MACARIO SAPUTALO, respondents.

G.R. No. L-66119 May 31, 1985

SANDOVAL SHIPYARDS, INC., petitioner,

vs.
VICENTE LEOGARDO, JR., Deputy Minister of Labor and Employment, DANILO DE LA
CRUZ, RODRIGO VILLARUZ, RODRIGO PEREZ, AQUILINO TABILON, ARMANDO
ESGLANDA, MANUEL MEDINA, FREDDIE ABADIEZ, FELICIANO TOLANG, ALFREDO DE
LA CRUZ, NICOLAS MARIANO, VICENTE CEBUANO, ROLANDO ROLDAN, TEODORO
ROLDAN, SOLOMON GEMINO, MARIO RICAFORT, ROLANDO LOPEZ and ANGEL
SAMSON, respondents.

Facts:

These cases are about the dismissal of alleged project workers. Sandoval Shipyards, Inc. has
been engaged in the building and repair of vessels. It contends that each vessel is a separate
project and that the employment of the workers is terminated with the completion of each
project.

The workers contend otherwise. They claim to be regular workers and that the termination of
one project does not mean the end of their employment since they can be assigned to
unfinished projects.

In G.R. No. 65689, Rogelio Diamante, Manuel Pacres, Macario Saputalo, Rolando Cervales
and Dionisio Cervales were assigned to the construction of the LCT Catarman, Project No.
7511. After three months of work, the project was completed on July 26, 1979. The five workers
were served a termination notice. The termination was reported to the Ministry of Labor on
August 3, 1979. They filed a complaint for illegal dismissal.

The National Labor Relations Commission affirmed the decision of the Labor Arbiter ordering
the reinstatement of the five complainants with backwages from July 27, 1979.
In G.R. No. 66119, respondents Danilo de la Cruz, et al., 17 in all, were assigned to work in
Project No. 7901 for the construction of a tanker ordered by Mobil Oil Philippines, Inc. There
were 55 workers in that project. The tanker was launched on January 31, 1980. Upon the yard
manager's recommendation, the personnel manager of Sandoval Shipyards terminated the
services of the welders, helpers and construction workers effective February 4, 1980. The
termination was duly reported to the Ministry of Labor and Employment.

Three days later, or on February 7, twenty-seven out of the 55 workers were hired for a new
project. The 27 included four of the 17 respondents who filed a complaint for illegal dismissal on
February 6.

After hearing, the Director of the Ministry's Capital Region ordered the reinstatement of the
complainants. The Deputy Minister of Labor affirmed that order.

Issue: WON Respondents are a project employee.

Held: We hold that private respondents were project employees whose work was coterminous
with the project for which they were hired. Project employees, as distinguished from regular or
non-project employees, are mentioned in section 281 of the Labor Code as those "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."

Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize employer-
employee relations in the construction industry, provides:

Project employees are those employed in connection with a particular

construction project. Non-project (regular) employees are those employed by a
construction company without reference to any 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. Moreover, the company is not
required to obtain clearance from the Secretary of Labor in connection with such
termination.

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. (139-140, Rollo of G. R. No. 65689).
 [G.R. No. 117043. January 14, 1998]

FELIX VILLA, ALIBANGBANG, IRENEO; ALIBANGBANG, EFREN; ABELLANOSA ELDIE; AGARAO, SOFRONIO;
ALIFANTA, JOSE; ALQUIZA, LORENZO; ALVIOLA, HERMOQUITO; AMONDINA, NOE; ANGOT, ISIDRO;
ANDRADA, CATALINO; ARUTA, ROBERTO; AVILES, ZALDY; APAON, CESAR; ARTAJO, EDWIN;
ALCOPRA, ANTONIO, JR.; BALASE, PABLITO; BANCALE, NEMESIO, BARICOG, GAUDENCIO;
BACULIO, CIPRIANO; BATION, DOMINGO; BAYER, FELYBERT; BENELAYO, JOVENCIO;
BERIGONDO, MARIANO; BEGORNIA, ELIZAR; BUTASLAC, APOLINAR; BONCALES, DIOLLE;
BASTATAS, ROSENDO; BLASABAS, BONIFACIO; BALDESCO, OLYMPIO; BARICUATRO, DELFIN;
BARBON, BEN; BENDONG, BERNARDO; BUTON, ROQUE; CAHAYAG, RODRIGO; CAHAYAG,
REMEGIO; CALDERON, DANILO; CANOY, ERLITO; CABUS, ZENAS; CAPIN, JUANITO; CIMENI,
ALBERTO; CELOSIA, MONTANO; CANILLO, TITO; COLOYAN, CARLOS; CUTAD, ALIPIO; CAPOTE,
LIBRENDO; COLALJO, EDGARDO; CABILUNA, ELIAS; CABILI, ARTHURO; COMA, ROGELIO; CASAS,
RODRIGO; COLLAMAR, ROSALIM; CABALLERO, ORLANDO; CARCELLAR, ANTONIO; DEGOMA,
DEOCADIO; DAGUISONAN, ROMEO; DE LA CRUZ, VICENTE; DELIMA, SEGUNDO; EDAYAN, ROSITO;
ELMEDULAN, RUDY; FLORES, RELENDIO; FLORES, CRESENCIANO; FLORES, GREGORIO; FLORES,
ROMUALDO; FUENTES, RODULFO; FORMENTERA, ELEUTERIO; GALUPO, ELMER; GARBAN,
FLORENCIO; GUZMAN, REYNALDO; GORDO, CEFERINO; GENON, ESTEBAN; GADIA, NERIO;
HERNANDO, BERNARDINO; JAPITAN, DANIEL;JUMAWAN, ROLANDO; LAGLARIO, ELPIDIO;
LAURINO, GENEROSO; LAPUZ, TEODOLO; LILA, NORBERTO; LLABAN, BONIFACIO; LUMEN,
ROMEO;LISUNDRA, JOSE; MACAPAS, ELIZALDE; MANLIGUEZ, SAMSON; MANCIO, ROBERTO;
MALINAO, CARLITO; MALAYA, SIMPLICIO; MANUGAS, NARCISO; MASIADA, EFREN; NARCISO,
ELIAS; NUEVA, JUSTINIANO; OBIDO, ANELOMIO; OLIVEROS, FRANCISCO; OCAY, FIDEL; OLADO,
JONATHAN; ONG, CARLITO; PAHUYO, HENRY; PAYPA, EDUARDO; PEREW-PEREW, ANTONIO;
PERMITES, BOBBY; PACAA, CRISTITUTO; PONGON, RUBEN; PATOY, MANUEL; POGALES,
ROBERTO; PARAGAMAC, MIGUEL; PARDILLO, ENGRACIO; PARAN, BENITO; RELLEN, RONNIE;
RENTUZA, ALFREDO; REBUTAZO, INOCENCIO; RUEDAS, SIEGFREDO; ROBLE, ERLITO; RAMIREZ,
CESAR; RAMAYRAT, ROBERTO; RAZO, WILLIE; RIVA, LEOPOLDITO; REYSOMA, BENNY; SANCHEZ,
ROMULO; SANCHEZ,MANUELITO; SARDUAL, CAYETANO; SIQUELLO, EDRIE; SALIG, MAGDALINO;
SIENES, GILBERT; SARA, NICANOR; SIACOR, LUCIO; SIMPROTA, CRISPIN; TABEROS, VIRGILIO;
TARDO, ALEX; TAMPOG, ALEJANDRE; TAMPARONG, FRANCISCO; TAMPARONG, PRIMO; TINOY,
JESUS; UMBAY, NOEL; UMBAY, RONILO; VACALARES, ALVIN; VELUS, CRISPIN; VERANO,
MANOLO; VILLARINO, FLORENCIO; VERGARA, JOSE; VILLAPLAZA, MARCELO; GALORIO, RUBEN;
DAYGAM, RUDENCIO; GELLICA, APOLLO; SARUSAL, FELIX; CAPUYAN, RUPERTO; VILLAMOR,
PEDRITO; ALLAS, AQULINO, JR.; GARBAN, DIOSCORO; DELIMA, DIOSDADO; OBIDO, ELISER (All
members of NSCWA with Felix Villa as president, representing Petitioners), petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION, Fifth Division and NATIONAL STEEL
CORPORATION, respondents.

Facts:

Respondent National Steel Corporation (NSC), one of the biggest modern steel mills in
Southeast Asia, produces hot rolled products, cold rolled products, tinplates and billets. These
products are in turn transformed by downstream industries into truss assemblies, farm
implements, pipe structures, shipbuilding and repairing materials, automotive structures and
machine parts, GI roof sheets or galvanized iron, drums, nails, fasteners and wires.[1]

National Steel Corporation (NSC) in Cagayan de Oro, in the first part of an expansion
program, constructed a Billet Steelmaking Plant. The plan was to first use scrap metal by
shipbreaking decommissioned ships before converting to the plant to a Direct Reduced Iron plant.
A billet is a semi-finished steel product later processed into steel bars and wire rods. Shipbreaking
means cutting up/salvaging ships and reprocessing the steel. However, after four or five ships,
the project was phased out because of the scarcity of vessels/ships for salvaging, the higher costs
of operation, and the unsuitability of raw materials. It was not a viable undertaking. The petitioners
are the former employees of the plant, being masons, carpenters, laborers, electricians, and
painters. Even before the plant was phased out, there were already many labour problems.
Notably, there was a strike complaining of (a) wage discrimination, (b) interference with the
employees right to self-organization, (c) nonregularization of contractual employees, (d) illegal
termination of employees, (e) nonpayment of wage/benefit differentials, and (f) nonrecognition of
NSCEASPFL as the sole bargaining representative of the company. The petitioner-workers
continually lost in the case with respect to regularization (they were awarded wage increases)
from the Labor Minister to the NLRC despite numerous MRs. The initial proceedings (1986) simply
ordered NSC to submit their complete records for the tribunals to be able to make a definite ruling,
in the meantime making a provisional ruling that the petitioners were project employees. The
correctness of this order was affirmed by the SC in an earlier case and remanded it back to the
NLRC. This decision by the NLRC (1992) affirmed their earlier resolution that the petitioners were
merely project employees. In the dispositive, it said that the individual rulings as to which petitioner
is contractual and which is regular, will be the subject of future proceedings. A break-away group
from the former group of petitioners MR this with the NLRC twice before raising the present case
to the SC for grave abuse of discretion. Note that if declared to be regular, the petitioners would
be reinstated.

Issue: WON Petitioners are project employees.

Held: Yes.
SC relies on the factual findings of labor administrative tribunals like the NLRC which have
acquired expertise because their jurisdiction is confined to specific matters. In its Decision and
Resolutions, the NLRC adamantly held that petitioners were contractual project employees who
are not entitled to regularization under Art. 280. 280 conceives of three kinds of employees:
regular employees or those who have been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; project employees or
those 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 services to be performed is seasonal in nature and the employment is for the
duration of the season, and casual employees or those who are neither regular nor project
employees.
In the earlier case with the same parties, the Court distinguished between two types of
projects: 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. (construction company that may undertake two or
more projects at the same time in different places) a project may refer to 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.
(instant case; expansion program being different component projects a distinct undertaking
identifiable from the ordinary business and activity of NSC)
The Supreme Court disposed of the regularization issue by reasoning that though: The
records show that the petitioners were utilized in operations other than billet making or other
components of the expansion porgram, such as shipbreaking. And while it is true that they
performed other activities which were necessary or desirable in the usual business of the NSC
And that the duration of their employment was for a period of more than one year. These factors
did not make them regular because: They remain project employees regardless of the number
of projects in which they have worked. Length of service is not the controlling determinant of the
employment tenure of a project employee. In the case of Mercado, Sr. v. NLRC, it was ruled that
the proviso in the second paragraph of Article 280, providing that an employee who has served
for at least one year, shall be considered a regular employees, relates only to casual employees
and not to project employees.

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.

Facts:

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

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.

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
petitioners 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.
Petitioner also claimed that the case has prescribed. The Court of Appeals ruled in favor of the
private respondents.

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 petitioners various construction projects for at
least one year, and that their work was necessary and desirable to petitioners business which
involved the construction of roads and bridges. 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. 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) petitioners
failure to place private respondents under SSS coverage was in good faith. The motion was
denied for lack of merit. Hence, this petition.

Issue: WON private respondents are project emplyees.

Held: No.

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 Courts 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 petitioners
various construction projects, they performed work which was usually necessary and desirable to
petitioners 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
timethe shortest being two years and the longest being eighthave 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 employers
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.
 [G.R. No. 116352. March 13, 1997]

J. & D.O. AGUILAR CORPORATION, petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION and ROMEO ACEDILLO, respondents.

Facts:

This petition for certiorari is questioning the decision of respondent National Labor Relations
Commission dated March 30, 1994, as well as its resolution of June 20, 1994, denying for lack of
merit petitioner's motion for reconsideration of said decision.
Private respondent Romeo Acedillo began working for petitioner in February 1989 as a
helper-electrician. On January 16, 1992, he received a letter from petitioner informing him of his
severance from the company allegedly due to lack of available projects and excess in the number
of workers needed. He decided to file a case for illegal dismissal before the NLRC after learning
that new workers were being hired by petitioner while his request to return to work was being
ignored. In reply, petitioner maintained that its need for workers varied, depending on contracts
procured in the course of its business of contracting refrigeration and other related works. It
contended that its workers are hired on a contractual or project basis, and their employment is
deemed terminated upon completion of the project for which they were hired. Finally, petitioner
argued that Acedillo was not a regular employee because his employment was for a definite
period and apparently made only to augment the regular work force.
On June 17, 1993, Labor Arbiter Arthur L. Amansec rendered judgment declaring Acedillo's
dismissal to be illegal, finding him to be a member of the regular work pool, and ordering petitioner
to pay him a total of P71,906.00 representing backwages, 13th month pay, separation pay in lieu
of reinstatement, service incentive leave pay and underpayment of wages.
On appeal, the NLRC affirmed Labor Arbiter Amansec's decision.

Issue: WON private respondent is a regular employee.

Held: Yes.

While respondent (herein petitioner) strongly maintains that complainant (Acedillo) was not a
regular worker, however, the nature of his job as a helper and the length of service that he had
been with respondent are clear proof(s) that he was a regular employee. For what determines
whether a certain employment is regular or casual is not the will and word of the employer, to
which the desperate worker often accedes, much less the procedure of hiring the employee or
the manner of praying (sic) his salary. It is the nature of the activities performed in relation to the
particular business or trade (of the employer) considering all circumstances, and in some cases
the length of time of its performance and its continued existence.[1] x x x Suffice it to state that
respondent's contention to show that he (Acedillo) was (a) regular employee will not prosper
because in the absence of any proof that he was hired on a project or contractual basis, the
valid presumption is that the employment is regular.
Likewise, respondent's allegation that since complainant was not a regular employee, he was
not entitled to any of his monetary claims must fail. Respondent must be reminded that payment
of these benefits in accordance with law does not depend on whether the worker is a regular,
casual or project worker. It is bound to comply with the basic requirement of (labor standards)
law on payment of (wages and other benefits) and proof of payment or non-payment thereof
rests on the respondent. It must be so because where the issue is the payment of labor
standards benefits, burden of proof is on the employer, not on the employees because the latter
are neither required nor expected to keep records of payment or non-payment of benefits
granted to them by law."

Petitioner is to be reminded that 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 services to be
performed is seasonal in nature and the employment is for the duration of the season." [2] The
records reveal that petitioner did not specify the duration and scope of the undertaking at the time
Acedillo's services were contracted. Petitioner could have easily presented an employment
contract showing that he was engaged only for a specific project, but it failed to do so. It is not
even clear if Acedillo ever signed an employment contract with petitioner. Neither is there any
proof that the duration of his assignment was made clear to him other than the self-serving
assertion of petitioner that the same can be inferred from the tasks he was made to perform.
What is clear is that Acedillo's work as a helper-electrician was an activity "necessary or
desirable in the usual business or trade"[3] of petitioner, since refrigeration requires considerable
electrical work. This necessity is further bolstered by the fact that petitioner would hire him anew
after the completion of each project, a practice which persisted throughout the duration of his
tenure.
The petitioner admits that it maintains two sets of workers, viz., those who are permanently
employed and get paid regardless of the availability of work and those who are hired on a project
basis.[4] This practice of keeping a work pool further renders untenable petitioner's position that
Acedillo is not a regular employee. As we held in the case of Philippine National Construction
Corporation v. NLRC,[5]
"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 any phase thereof will not mean severance of (the) employer-
employee relationship.

WHEREFORE, in view of the foregoing, the instant petition

for certiorari is DISMISSED. Costs against petitioner.
SO ORDERED.