Herma Shipyard, Inc. and Mr. Herminio Esguerra VS. Danilo Oliveros, et al.
G.R. No. 208936
April 17, 2017
Facts:
Herma Shipyard, Inc. is a domestic corporation engaged in the business of shipbuilding and repair. The respondents were its employees occupying various positions such as welder, leadman, pipe fitter, laborer, helper, etc.
On June 17, 2009, the respondents filed before the Regional Arbitration Branch III, San Fernando City, Pampanga a complaint for illegal dismissal, regularization, and non-payment of service incentive leave pay with prayer for the payment of full back wages and attorney's fees against petitioners. Respondents alleged that they are Herma Shipyard's regular employees who have been continuously performing tasks usually necessary and desirable in its business. On various dates, however, petitioners dismissed them from employment.
Resoondents further alleged that as a condition to their continuous and uninterrupted employment, petitioners made them sign employment contracts for a fixed period ranging from one to four months to make it appear that they were project-based employees. Per respondents, petitioners resorted to this scheme to defeat their right to security of tenure, but in truth there was never a time when they ceased working for Henna Shipyard due to expiration of project-based employment contracts. In fact, if they were indeed project employees, petitioners should have reported to the Department of Labor and Employment (DOLE) the completion of such project. But petitioners have never submitted such report to the DOLE.
For their defense, petitioners argued that respondents were its project-based employees in its shipbuilding projects and that the specific project for which they were hired had already been completed. In support, thereof, Herma Shipyard presented contracts of employment, some of which are written in the vernacular and denominated as Kasuduang Paglilingkod (Pang-Proyektong Kawani)
Issue:
Whether or not the respondents were project-based employees and not regular employees
Held:
Who are project-based employees?
Art, 280. Regular and Casual Employment. The provisions of written agreement for the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except 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 or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.
The services of project-based employees are co-terminous with the project and may be terminated upon the end or completion of the project or a phase thereof for which they were hired. The principal test in determining whether particular employees were engaged as project-based employees, as distinguished from regular employees, is whether they were assigned to carry out a specific project or undertaking, the duration and scope of which was specified at, and made known to them, at the time of their engagement. It is crucial that the employees were informed of their status 8rS project employees at the time of hiring and that the period of their employment must be knowingly and voluntarily agreed upon by the parties, without any force, duress, or improper pressure being brought to bear upon the employees or any other circumstances vitiating their consent.
It is settled, however, that project-based employees may or may not be performing tasks usually necessary or desirable in the usual business or trade of the employer. The fact that the job is usually necessary or desirable in the business operation of the employer does not automatically imply regular employment; neither does it impair the validity of the project employment contract stipulating ~ fixed duration of employment. As this Court held in ALU-TUCP vs National Labor Relations Commission:
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 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. 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 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.
The term “project” could also refer to, secondly, 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.
In sum, the CA erred in disregarding the project employment contracts and in concluding that respondents have become regular employees because they were performing tasks necessary and desirable to the business of Henna Shipyard and were repeatedly rehired. The Labor Arbiter and the NLRC, which have expertise in their specific and specialized jurisdiction, did not err, much less commit grave abuse of discretion in holding that respondents were project-based employees. Their uniform conclusion is supported by substantial evidence and should, therefore, be accorded not only respect, but even finality.
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