Republic of the
Supreme Court
|
D.M.
CONSUNJI, INC., Petitioner, -
versus - ANTONIO GOBRES, MAGELLAN DALISAY,
GODOFREDO PARAGSA, EMILIO ALETA and GENEROSO MELO, Respondents. |
G.R. No. 169170 Present:
CARPIO, J., Chairperson, nachura, PERALTA, ABAD, and MENDOZA, JJ. Promulgated: August 8, 2010 |
x---------------------------------------------------------------------------------------x
D E C I S I O N
PERALTA, J.:
This
is a petition for review on certiorari[1] of
the Decision of the Court of Appeals in CA-G.R. SP No. 70708, dated
The
facts are as follows:
Respondents
Antonio Gobres, Magellan Dalisay, Godofredo Paragsa, Emilio Aleta and Generoso
Melo worked as carpenters in the construction
projects of petitioner D.M. Consunji, Inc., a construction company, on several occasions and/or at various times.
Their termination from employment for each project was reported to the
Department of Labor and Employment (DOLE), in accordance with Policy
Instruction No. 20, which was later superseded by Department Order No. 19,
series of 1993. Respondents’ last
assignment was at Quad 4-Project in Glorietta, Ayala,
Respondents filed a Complaint with the Arbitration Branch of the National
Labor Relations Commission (NLRC) against petitioner D.M. Consunji, Inc. and
David M. Consunji for illegal dismissal, and non-payment of 13th
month pay, five (5) days service incentive leave pay, damages and attorney’s
fees.
Petitioner
D.M. Consunji, Inc. and David M. Consunji countered that respondents, being
project employees, are covered by Policy Instruction No. 20, as superseded by
Department Order No. 19, series of 1993 with respect to their separation or
dismissal. Respondents were employed per project undertaken by petitioner company
and within varying estimated periods indicated in their respective project
employment contracts. Citing the
employment record of each respondent, petitioner and David M. Consuji averred that
respondents’ services were terminated when their phases of work for which their
services were engaged were completed or when the projects themselves were
completed. Respondents’ notices of termination were filed with the DOLE, in
compliance with Policy Instruction No. 20,[2] superseded
by Department Order No.19, series
of 1993.[3] With
respect to respondent Generoso G. Melo, petitioner and David M.
Consuji maintained the same positions they had against the case of Melo’s
co-complainants.[4] Petitioner contended that
since respondents were terminated by reason of the completion of their
respective phases of work in the construction project, their termination was
warranted and legal.[5]
Moreover, petitioner claimed that respondents have been duly paid their
service incentive leave pay and 13th month pay through their
respective bank accounts, as evidenced by bank remittances.[6]
Respondents
replied that the Quad 4-Project at Glorietta, Ayala,
On
Respondents
appealed the Labor Arbiter’s Decision to the NLRC
In
a Resolution[9] dated
Respondents’
motion for reconsideration was denied by the NLRC for lack of merit in its
Order[10]
dated
Respondents
filed a petition for certiorari with
the Court of Appeals, seeking the annulment of the NLRC Resolution dated
On
WHEREFORE, the
Decision and Resolution of the NLRC in finding petitioners’ dismissal as valid
are AFFIRMED with MODIFICATION that private respondents are ordered to pay each
of the petitioners the sum of P20,000.00 as nominal damages for
non-compliance with the statutory due process.
Costs against petitioners.[11]
The Court of Appeals sustained the
findings of the NLRC that respondents are project employees. It held:
The
Labor Arbiter and [the] NLRC correctly applied Article 280 of the Labor Code
when it ruled that petitioners’ employment, which is fixed for [a] specific
project and the completion of which has been determined at the time that their
services were engaged, makes them project employees. As could be gleaned from the last portion of
Article 280 of the Labor Code, the nature of employment of petitioners, which
is fixed for a specific project and the completion of which has been determined
when they were hired, is excepted therefrom.
This
is the reason why under Policy Instruction No. 20 and Department Order No. 19,
series of 1993, employers of project employees are required to report their
termination to DOLE upon completion of the project for which they were engaged.[12]
The CA stated that although respondents were
project employees, they were entitled to know the reason for their dismissal
and to be heard on whatever claims they might have. It held that respondents’
right to statutory due process was violated for lack of advance notice of their
termination, even if they were validly terminated for having completed the phases
of work for which they were hired. The appellate court stated that had
respondents been given prior notice, they would not have reported for work on P20,000.00 each as nominal damages for lack of advance
notice of their termination.
Petitioner and David M. Consunji filed a
partial motion for reconsideration and prayed that the Decision of the Court of
Appeals be partially reconsidered by deleting the award of nominal damages to each
respondent. It pointed out that under Department Order No. 19, series of 1993,
which is the construction industry’s governing law, there is no provision requiring administrative
hearing/investigation before a project employee may be terminated on account of
completion of phase of work or the project itself. Petitioner also argued that prior notice of
termination is not required in this case, and that Agabon
is not applicable here, because the termination in Agabon
was for cause, while herein
respondents were terminated due to the completion of the phases of work for
which their services were engaged.
In a Resolution[14]
dated
Petitioner D.M. Consunji, Inc. filed this
petition raising this question of law:
WHETHER
OR NOT THERE IS BASIS FOR THE COURT OF APPEALS IN ORDERING HEREIN PETITIONER TO
PAY RESPONDENTS EACH THE SUM OF P20,000.00 AS NOMINAL DAMAGES FOR
“ALLEGED” NON-COMPLIANCE WITH THE STATUTORY DUE PROCESS.[15]
Petitioner contends that the award of nominal damages in the amount of P20,000.00
to each respondent is unwarranted under Section 2 (III), Rule XXIII, Book V of
the Omnibus Rules Implementing the Labor Code, which states, “If the
termination is brought about by the completion of the contract or phase
thereof, no prior notice is required.”[16]
Petitioner also contends that Agabon
v. NLRC is not applicable to this case.
The termination therein was for just cause due to abandonment of work,
while in this case, respondents were terminated due to the completion of the
phases of work.
In support of its argument, petitioner
cited Cioco, Jr. v. C.E. Construction
Corporation,[17] which held:
x x x More
importantly, Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code
provides that no prior notice of termination is required if
the termination is brought about by completion of the contract or phase thereof
for which the worker has been engaged. This is because completion of the
work or project automatically terminates the employment, in which case, the
employer is, under the law, only obliged to render a report to the DOLE on the
termination of the employment.[18]
The petition is
meritorious.
Respondents
were found to be project employees by the Labor Arbiter, the NLRC and the Court
of Appeals. Their unanimous finding that respondents are project employees is
binding on the Court. It must also be pointed out that respondents have not
appealed from such finding by the Court of Appeals. It is only the petitioner that appealed from
the decision of the Court of Appeals.
The main issue is whether or not respondents, as project
employees, are entitled to nominal damages for lack of advance notice of their
dismissal.
A project employee is defined under Article
280 of the Labor Code 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 services to be performed is seasonal in nature
and the employment is for the duration of the season.”[19]
In this case, the Labor Arbiter, the
NLRC and the Court of Appeals all found that respondents, as project employees,
were validly terminated due to the completion of the phases of work for which their services were
engaged. However, the Court of Appeals
held that respondents were entitled to nominal damages, because petitioner failed
to give them advance notice of their
termination. The appellate court cited the case of Agabon v. NLRC as basis for the award of nominal damages.
The Court holds that Agabon v. NLRC is not applicable to this
case, because it involved the dismissal of regular employees for abandonment of
work, which is a just cause for dismissal under Article 282 of the Labor Code.[20]
Although the dismissal was for a cause, the employer therein was required to
observe the standard of due process for termination of employment based on just
causes under Article 282 of the Labor Code, which procedural due process requirements are enumerated in Section 2, Rule 1, Book VI[21]
of the Omnibus Rules Implementing the Labor Code.[22] Since the employer therein failed to comply
with the twin requirements of notice and hearing, the Court ordered the employer to pay the employees involved nominal damages in the
amount of P30,000.00 for failure to observe procedural due process.
Unlike in Agabon, respondents, in this case, were not terminated for just
cause under Article 282 of the Labor Code.
Dismissal based on just causes contemplate acts or omissions
attributable to the employee.[23] Instead, respondents were terminated due to
the completion of the phases of work for which their services were engaged.
As project employees, respondents’ termination
is governed by Section 1 (c) and Section 2 (III), Rule XXIII (Termination of
Employment), Book V of the Omnibus Rules Implementing the Labor Code.
Section 1 (c), Rule XXIII, Book V of
the Omnibus Rules Implementing the Labor Code states:
Section
1. Security
of tenure. — (a) In cases of regular employment, the employer shall not
terminate the services of an employee except for just or authorized causes as
provided by law, and subject to the requirements of due process.
x
x x x
(c) In cases of project employment or
employment covered by legitimate contracting or sub-contracting arrangements, no
employee shall be dismissed prior to the completion of the
project or phase thereof for which the employee was engaged, or prior to
the expiration of the contract between the principal and contractor, unless
the dismissal is for just or authorized cause subject to the requirements
of due process or prior notice, or is brought about by the completion of the
phase of the project or contract for which the employee was engaged.[24]
Records show that respondents were
dismissed after the expiration of their respective project employment contracts,
and due to the completion of the phases of work respondents were engaged for.
Hence, the cited provision’s requirements of due process or prior notice when
an employee is dismissed for just or
authorized cause (under Articles 282 and 283 of the Labor Code) prior to
the completion of the project or phase thereof for which the employee was
engaged do not apply to this case.
Further, Section
2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code provides:
Section
2. Standard of due process: requirements
of notice. — In all cases of termination of employment, the following
standards of due process shall be substantially observed.
1.
For termination of employment based on just causes as defined in Article 282 of
the Code:
(a)
A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to
explain his side;
(b)
A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to
respond to the charge, present his evidence or rebut the evidence presented
against him; and
(c)
A written notice [of] termination served on the employee indicating that upon
due consideration of all the circumstance, grounds have been established to
justify his termination.
In
case of termination, the foregoing notices shall be served on the employee’s
last known address.
II.
For termination of employment as based on authorized causes defined in Article
283 of the Code, the requirements of due process shall be deemed complied with
upon service of a written notice to the employee and the appropriate Regional
Office of the Department at least thirty (30) days before the effectivity of
the termination, specifying the ground or grounds for termination.
III.
If the termination is brought about
by the completion of the contract or phase thereof, no prior notice is required. If the termination is brought about by
the failure of an employee to meet the standards of the employer in the case of
probationary employment, it shall be sufficient that a written notice is served
the employee within a reasonable time from the effective date of termination.[25]
In this case, the Labor Arbiter, the
NLRC and the Court of Appeals all found that respondents were validly
terminated due to the completion of the
phases of work for which respondents’
services were engaged. The above rule clearly states, “If the termination is brought about by the
completion of the contract or phase thereof, no prior notice is required.” Cioco,
Jr. v. C.E. Construction Corporation[26]
explained that this is because completion of the work or project automatically
terminates the employment, in which case, the employer is, under the law, only
obliged to render a report to the DOLE on the termination of the employment.
Hence, prior or advance
notice of termination is not part of procedural due process if the termination
is brought about by the completion of the contract or phase thereof for which the
employee was engaged. Petitioner,
therefore, did not violate any requirement of procedural due process by failing
to give respondents advance notice of their termination; thus, there is no
basis for the payment of nominal damages.
In sum, absent the requirement of prior
notice of termination when the
termination is brought about by the completion of the contract or phase thereof
for which the worker was hired, respondents
are not entitled to nominal damages for lack of advance notice of their
termination.
WHEREFORE,
the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R.
SP No. 70708, dated
No
costs.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE
CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ANTONIO EDUARDO B. NACHURA ROBERTO A. ABAD
Associate Justice
Associate Justice
JOSE CATRAL
Associate Justice
ATTESTATION
I attest 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.
ANTONIO T. CARPIO
Associate
Justice
Second
Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the
Division Chairperson’s Attestation, 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.
RENATO
C. CORONA
Chief Justice
[1] Under
Rule 45 of the Rules of Court.
[2] Policy No. 20: Stabilizing Employer-Employee Relations in the Construction Industry
In the interest of stabilizing employer-employee relations in the construction industry and taking into consideration its unique characteristics, the following policy instructions are hereby issued for the guidance of all concerned:
Generally, there are two types of employees in the construction industry, namely: a) Project employees, and 2) Non-Project employees.
Project employees are those employed in connection with a particular construction project. x x x
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 a clearance from the Secretary of Labor in connection with such termination. What is required of the company is a report to the nearest Public Employment Office for statistical purposes.
[3] Department Order No. 19, series of 1993
x x x x
2.2
Indicators of project employment. Either one or more of the following
circumstances, among others, 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.
xxxx
6.1.
Requirements of labor and social legislations. (a) The construction company and
the general contractor and/or subcontractor referred to in Sec. 2.5 shall be
responsible for the workers in its employ on matters of compliance with the
requirements of existing laws and regulations on hours of work, wages, wage
related benefits, health, safety and social welfare benefits, including submission to the DOLE-Regional Office of Work Accident/Illness Report,
Monthly Report on Employees' Terminations/Dismissals/Suspensions and
other reports x x x. (Emphasis
supplied.)
[4] Decision of the Labor Arbiter, rollo, p. 264.
[5] Respondents’ Position Paper, CA rollo, p. 27;
[6] Respondents’ Position Paper, CA rollo, p. 40.
[7] Reply & Rejoinder to Respondents’ Position Paper, CA rollo, p. 46.
[8] Rollo, pp. 263-265.
[9]
[10]
[11]
[12]
[13] 485 Phil. 248 (2004).
[14] Rollo, pp. 47-49.
[15]
[16] Emphasis supplied.
[17] 481 Phil. 270 (2004). (Emphasis and underscoring supplied.)
[18]
[19] See Saberola v. Suarez, G.R. No. 151227,
[20] Art.
282. Termination by employer -- An employer may terminate an employment
for any of the following causes:
a.
Serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work;
b.
Gross and habitual neglect by the employee of his duties;
c.
Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
d.
Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized representative;
and
e.
Other causes analogous to the foregoing.
[21] Section 2. Security of Tenure. x x x (d) In all cases of termination of employment,
the following standards of due process shall be
substantially observed: For termination of employment based on just
causes as defined in Article 282 of the Code:
(i)
A written notice served on the employee specifying the ground or grounds for
termination, and giving said employee reasonable opportunity within which to
explain his side.
(ii)
A hearing or conference during which the employee concerned, with the
assistance of counsel if he so desires is given opportunity to respond to the
charge, present his evidence or rebut the evidence presented against him.
(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstance, grounds have been established to justify his termination.
[22] Agabon v. National Labor Relations Commission, supra note 13, at 284.
[23]
[24] Emphasis and underscoring supplied.
[25] Emphasis and underscoring supplied.
[26] Supra note 17.