and
YOLANDA DELOS REYES,
Petitioners,
Present:
Respondent.
July 3, 2009
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CARPIO, J.:
The Case
Before
the Court is a petition for review[1]
of the 31 March 2004 Decision[2]
and 14 June 2004 Resolution[3]
of the Court of Appeals in CA-G.R. SP No. 75965. In its 31 March 2004 Decision, the Court of
Appeals set aside the 20 February 2002 Decision[4]
of the National Labor Relations Commission (NLRC) and reinstated the 24
September 1998 Decision[5]
of the Labor Arbiter which declared respondent Rene R. Relos (respondent) a
regular employee of petitioner Alcatel Philippines, Inc. (Alcatel). In its 14 June 2004 Resolution, the Court of
Appeals denied the motion for reconsideration of Alcatel and petitioner Yolanda
Delos Reyes (petitioner Delos Reyes).
The Facts
Alcatel
is a domestic corporation primarily engaged in the business of installation and
supply of telecommunications equipment.
Petitioner Delos Reyes was a former Administrative Officer of Alcatel.
On
4 January 1988, Alcatel offered respondent “temporary employment as
Estimator/Draftsman – Civil Works to assist in the preparation of manholes and
conduit design for the proposal preparation for PLDT X-5 project for the period
4 January 1988 to 28 February 1988.”[6] On 1 March 1988, Alcatel again offered
respondent “temporary employment as Estimator/Draftsman to assist in the PLDT’s
X-4 IOT project for the period 1 March
1988 to 30 April 1988.”[7]
Subsequently,
Alcatel undertook the PLDT 1342 project (project) which involved the
installation of microwave antennas and towers in Eastern Visayas and Eastern
Mindanao for the Philippine Long Distance Company. On 1 February 1991, Alcatel offered
respondent “temporary employment as Civil Works Inspector, to assist in the
implementation of the PLDT 1342 Project, for the period 1 February 1991 to 31
March 1991.”[8] Upon the expiration of his contract,
respondent was again offered temporary employment this time as Civil Works
Engineer from 1 April 1991 to 30 September 1991.[9] Respondent was offered temporary employment
in the same capacity five more times from 1 October 1991 to 31 July 1992.[10] Then, on 1 August 1992, Alcatel hired
respondent as “project employee for the PLDT 1342 project to work as Civil
Engineer from the period of 1 August 1992 to 31 July 1993.”[11] Alcatel renewed respondent’s contract twice from
1 August 1993 to 31 December 1993.[12] In a letter dated 22 December 1993,[13] Alcatel informed respondent that the civil
works portion of the project was near completion; however, the remaining works
encountered certain delays and had not been completed as scheduled. Alcatel then extended respondent’s employment
for another three months or until 31 March 1994. Thereafter, Alcatel employed respondent as a
Site Inspector until 31 December 1995.[14]
On
11 December 1995, Alcatel informed respondent that the project would be
completed on 31 December 1995 and that his contract with Alcatel would expire
on the same day.[15] Alcatel asked respondent to settle all his
accountabilities with the company and advised him that he would be called if it
has future projects that require his expertise.
In
March 1997, respondent filed a complaint for illegal dismissal, separation pay,
unpaid wages, unpaid overtime pay, damages, and attorney’s fees against
Alcatel. Respondent alleged that he was
a regular employee of Alcatel and that he was dismissed during the existence of
the project.
In
its 24 September 1998 Decision, the Labor Arbiter declared that respondent was
a regular employee of Alcatel. The Labor
Arbiter also ruled that respondent was illegally dismissed and, therefore,
entitled to back wages. The Labor
Arbiter’s Decision provides:
WHEREFORE, premises considered, judgment is hereby rendered, finding that [sic] complainant to be a regular employee and finding further that [sic] complainant to have been illegally dismissed from employment and ordering respondents, jointly and severally, to pay complainant the following:
1.
Backwages from the time he was illegally dismissed until his actual
reinstatement in the amount of THREE HUNDRED FORTY EIGHT THOUSAND PESOS (P348,000.00). The award of backwages shall be re-computed
once this decision has become final;
2.
Money claims in the total amount of FOURTEEN THOUSAND TWO HUNDRED FORTY
PESOS (P14,240.00);
3. Attorney’s fees of ten (10%) percent of the total monetary award.
SO ORDERED.[16]
Alcatel
appealed to the NLRC.
In
its 20 February 2002 Decision, the NLRC reversed the Labor Arbiter’s Decision
and dismissed respondent’s complaint for illegal dismissal. The NLRC declared that respondent was a
project employee and that respondent was not illegally dismissed but that his
employment contract expired.
Respondent
filed a motion for reconsideration. In
its 19 December 2002 Order,[17]
the NLRC denied respondent’s motion.
Respondent
appealed to the Court of Appeals.
In
its 31 March 2004 Decision, the Court of Appeals set aside the NLRC’s Decision
and reinstated the Labor Arbiter’s Decision.
Alcatel
filed a motion for reconsideration. In
its 14 June 2004 Resolution, the Court of Appeals denied Alcatel’s motion.
Hence,
this petition.
The Ruling of the Labor Arbiter
The
Labor Arbiter declared that, since respondent was repeatedly hired by Alcatel,
respondent performed functions that were necessary and desirable in the usual
business or trade of Alcatel. The Labor
Arbiter concluded that respondent belonged to the “work pool of non-project
employees” of Alcatel.
As
to the project, the Labor Arbiter noted that respondent’s employment contracts
did not specify the project’s completion date.
The Labor Arbiter said that a short extension of respondent’s employment
contract was believable, but an extension up to 1995, when respondent was
originally engaged only from 1 February to 31 March 1991, was
unbelievable. The Labor Arbiter also
said that Alcatel’s unsubstantiated claim, that the project was merely extended
for “unavoidable causes,” was absurd.
The Labor Arbiter concluded that there was really no fixed duration of
the project and that Alcatel used the periods of employment as a facade to show
that respondent was only a project employee.
The Ruling of the NLRC
The
NLRC set aside the Labor Arbiter’s ruling and declared that respondent was a
project employee. The NLRC said
respondent was assigned to carry out a specific project or undertaking and the
duration of his services was always stated in his employment contracts. The NLRC also pointed out that, by the
nature of Alcatel’s business, respondent would remain a project employee
regardless of the number of projects for which he had been employed. Since respondent was a project employee, the
NLRC said he was not illegally dismissed, but that his dismissal was brought
about by the expiration of his employment contract.
The Ruling of the Court of Appeals
The
Court of Appeals set aside the NLRC’s decision and reinstated the Labor
Arbiter’s ruling. The Court of Appeals
declared that respondent was a regular employee of Alcatel because (1)
respondent was assigned to positions and performed tasks that were necessary to
the main line and business operations of Alcatel; (2) respondent was repeatedly
hired and contracted, continuously and for prolonged periods, with his
employment contracts renewed each time they fell due; and (3) Alcatel did not report the termination
of the projects with the nearest public employment office. The Court of Appeals also said that, although
respondent’s employment contracts specified that he was being engaged for a
specific period, there was no clear provision on the actual scope of the
project for which respondent was engaged or the actual length of time that the
project was going to last. The Court of
Appeals concluded that Alcatel imposed the periods of employment to preclude
respondent from acquiring tenurial security.
The Issues
Alcatel
raises the following issues:
1.
Whether
respondent was a regular employee or a project employee; and
2.
Whether
respondent was illegally dismissed.
The Ruling of the Court
The
petition is meritorious.
Alcatel
argues that respondent was a project employee because he worked on distinct projects
with the terms of engagement and the specific project made known to him at the
time of the engagement. Alcatel
clarifies that respondent’s employment was coterminous with the project for
which he was hired and, therefore, respondent was not illegally dismissed but
was validly dismissed upon the expiration of the term of his project
employment. Alcatel explains that its
business relies mainly on the projects it enters into and thus, it is
constrained to hire project employees to meet the demands of specific projects.
On
the other hand, respondent insists that he is a regular employee because he was
assigned by Alcatel on its various projects since 4 January 1988 performing
functions desirable or necessary to Alcatel’s business. Respondent adds that his employment contracts
were renewed successively by Alcatel for seven years. Respondent contends that, even assuming that
he was a project employee, he became a regular employee because he was re-hired
every termination of his employment contract and he performed functions
necessary to Alcatel’s business.
Respondent also claims that he was illegally dismissed because he was
dismissed during the existence of the
project.
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.[18] “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.[19]
In
our review of respondent’s employment contracts, we are convinced that
respondent 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.
We
do not agree with respondent that he became a regular employee because he was
continuously rehired by Alcatel every termination of his contract. In Maraguinot, Jr. v. NLRC,[20]
we said:
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.[21] (Emphasis ours)
While respondent 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
respondent’s 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. Alcatel’s 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 respondent a regular employee of Alcatel as respondent was not
continuously rehired after the cessation of a project. Respondent 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. Here, Alcatel employed
respondent as a Site Inspector until 31 December 1995.
WHEREFORE,
we GRANT the petition. We SET ASIDE the 31 March 2004 Decision and 14 June 2004
Resolution of the Court of Appeals and REINSTATE the 20 February 2002
Decision and 19 December 2002 Order of the National Labor Relations Commission.
SO
ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief
Justice
Chairperson
RENATO C. CORONA TERESITA
J. LEONARDO-DE CASTRO
Associate Justice Associate Justice
LUCAS P. BERSAMIN
Associate Justice
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, I certify that the conclusions
in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Under Rule 45 of the Rules of Court.
[2] Rollo, pp. 26-35. Penned by Associate Justice Rodrigo V. Cosico, with Associate Justices Mariano C. Del Castillo and Vicente Q. Roxas, concurring.
[3] Id. at 37.
[4] Id. at 95-114. Penned by Commissioner Vicente S.E. Veloso (now Associate Justice of the Court of Appeals), with Presiding Commissioner Roy V. Señeres and Commissioner Alberto R. Quimpo concurring.
[5] Id. at 72-77. Penned by Labor Arbiter Romulus S. Protacio.
[6] Id. at 246-247 (Annex “1” ).
[7] Id. at 248-249 (Annex “2”).
[8] Id. at 38 (Annex “C”).
[9] Id. at 39-40 (Annex “C-1”).
[10] Id. at 41-50 (Annexes “C-2” to “C-6”).
[11] Id. at 51-52 (Annex “C-7”).
[12] Id. at 53-56 (Annexes “C-8” and “C-9”).
[13] Id. at 57-58 (Annex “C-10”).
[14] Id. at 59-62 (Annexes “C-11” to “C-14”).
[15] Id. at 63 (Annex “D”).
[16] Id. at 76-77.
[17] Id. at 141-143.
[18] Imbuido v. National Labor Relations Commission, 385 Phil. 999 (2000).
[19] Tomas Lao Construction v. National Labor Relations Commission, 344 Phil. 268 (1997).
[20] 348 Phil. 580 (1998).
[21] Id. at 600-601.