LYNVIL FISHING ENTERPRISES, INC. aside the Decision of the Labor Arbiter.

v. ARIOLA The private respondents except Elorde Baz

filed a Petition for Certiorari before the
FACTS: Lynvil is a company engaged in
Court of Appeals alleging grave abuse of
deep-sea fishing, operating along the
discretion on the part of NLRC. The Court
shores of Palawan and other outlying
of Appeals found merit in the petition and
islands of the Philippines. Lynvil received a
reinstated the Decision of the Labor
report from Romanito Clarido, one of its
Arbiter except as to the award of
employees, that on 31 July 1998, he
attorneys fees. Hence, this petition.
witnessed that while on board the
company vessel Analyn VIII, Lynvil ISSUE: WON dismissal was illegal
employees conspired with one another
HELD: No. An employer may terminate an
and stole 8 tubs of "pampano" and
employment based on fraud or willful
"tangigue" fish and delivered them to
breach of the trust reposed on the
another vessel, to the prejudice of Lynvil.
employee. The Labor Code provides that
By reason of the report and after initial
an employer may terminate an
investigation, Lynvils General Manager De
employment based on fraud or willful
Borja summoned respondents to explain
breach of the trust reposed on the
within 5 days why they should not be
employee. Such breach is considered
dismissed from service. Failing to explain
willful if it is done intentionally, knowingly,
as required, respondents employment was
and purposely, without justifiable excuse,
terminated. Lynvil, through De Borja, filed
as distinguished from an act done
a criminal complaint against the dismissed
carelessly, thoughtlessly, heedlessly or
employees for violation of P.D. 532, or the
inadvertently. It must also be based on
Anti-Piracy and Anti-Highway Robbery Law
substantial evidence and not on the
of 1974 before the Office of the City
employers whims or caprices or suspicions
Prosecutor of Malabon City. First Assistant
otherwise, the employee would eternally
City Prosecutor Rosauro Silverio found
remain at the mercy of the employer. Loss
probable cause for the indictment of the
of confidence must not be indiscriminately
dismissed employees for the crime of
used as a shield by the employer against
qualified theft.
a claim that the dismissal of an employee
Upon being informed about this, Ariola, was arbitrary. And, in order to constitute a
Calinao, Nubla and Sebullen went to the just cause for dismissal, the act
Lynvil office. However, they were told that complained of must be work-related and
their employments were already shows that the employee concerned is
terminated. Aggrieved, the employees unfit to continue working for the
filed with the Arbitration Branch of NLRC- employer.
NCR a complaint for illegal dismissal with
In addition, loss of confidence as a just
claims for backwages, salary differential
cause for termination of employment is
reinstatement, service incentive leave,
premised on the fact that the employee
holiday pay and its premium and 13th
concerned holds a position of
month pay from 1996 to1998. They also
responsibility, trust and confidence or that
claimed for moral, exemplary damages
the employee concerned is entrusted with
and attorneys fees for their dismissal with
confidence with respect to delicate
bad faith.
matters, such as the handling or care and
Labor Arbiter Ramon Valentin C. Reyes protection of the property and assets of
found merit in complainants charge of the employer. The betrayal of this trust is
illegal dismissal. NLRC reversed and set
the essence of the offense for which an accomplished. The last element, the so-
employee is penalized. called “control test”, is the most important
element.

SONZA vs ABS-CBN
Applying the control test, Sonza is not an
FACTS: In May 1994, Respondent ABS-
employee but an independent contractor.
CBN signed an agreement with the Mel
Individuals with special skills, expertise or
and Jay Management and Development
talent enjoy the freedom to offer their
Corporation (MJMDC) where the latter
services as independent contractors.
agreed to provide Sonza’s services
Control test is based on the extent of
exclusively to ABS-CBN as talent for radio
control the hirer exercises over a worker.
and television. ABS-CBN agreed to pay
A radio broadcast specialist who only
Sonza a monthly talent fee of P310k for
needs his talents and skills to perform his
the first year and P317k for the second
job and works under minimal supervision
and third year. In 1996, Sonza wrote a
is an independent contractor. The records
letter to ABS-CBN for resignation and
do not show that ABS-CBN exercised any
rescission of the contract. The letter also
supervision and control over how SONZA
contained the waiver and renunciation for
utilized his skills and talent in his shows.
recovery of the remaining amount
The rules imposed by ABS-CBN on Sonza
stipulated but reserves the right to seek
did not control his performance but these
recovery of the other benefits under said
were merely guidelines towards the
Agreement. Sonza then filed with DOLE a
achievement of the mutually desired
complaint alleging that ABS-CBN did not
result, which are top-rating television and
pay his salaries, separation pay, service
radio programs that comply with
incentive pay, 13th month pay, signing
standards of the industry. Even the
bonus, travel allowance and amounts
exclusivity clause in the Agreement is not
under the Employees Stock Option Plan
a form of control which ABS-CBN
(ESOP). ABS-CBN contended there’s no E-
exercised over him. The hiring of exclusive
ER. However, ABS-CBN continued to remit
talents is a practice not designed to
Sonza’s monthly talent fees. LA dismissed
control the means and methods of work of
the complaint and aid there is no E-ER
the talent, but simply to protect the
relationship and ruled that he is not an
investment of the broadcast station. Not
employee by reason of his peculiar skill
every performance of services for a fee
and talent as a TV host and a radio
creates an employer-employee
broadcaster. Unlike an ordinary employee,
relationship. To hold that every person
he was free to perform his services in
who renders services to another for a fee
accordance with his own style. NLRC and
is an employee – to give meaning to the
CA affirmed the LA.
security of tenure clause – will lead to
ISSUE: WoN E-ER relationship between a absurd results.
television and radio station and one of its
talents, a program host.
CONSOLIDATED BROADCASTING
HELD: No. Elements of an E-ER
SYSTEM vs. OBERIO
relationship are selection and engagement
of the employee, the payment of wages, FACTS: Respondents were employed as
the power of dismissal and the employer’s drama talents by DYWB-Bombo Radyo, a
power to control the employee on the radio station owned and operated by
means and methods by which the work is petitioner Consolidated Broadcasting
System, Inc. They reported for work daily
for six days in a week and were required
to record their drama production in
advance. Sometime in August 1998,
petitioner reduced the number of its
drama productions from 14 to 11, but was
opposed by respondents. DOLE conducted
through its Regional Office, an inspection
of DWYB station. The results thereof
revealed that petitioner is guilty of
violation of labor standard laws, such as
underpayment of wages, 13th month pay,
non-payment of service incentive leave
pay, and non-coverage of respondents
under the Social Security
System.Petitioner contended that
respondents are not its employees and
refused to submit the payroll and daily
time records despite the subpoena duces
tecum issued by the DOLE RD. Petitioner
further argued that the case should be
referred to the NLRC because the RD has
no jurisdiction over the determination of
the existence of employer-employee
relationship which involves evidentiary
matters that are not verifiable in the
normal course of inspection. Vexed by the
respondents’ complaint, petitioner
allegedly pressured and intimidated
respondents. Respondents Oberio and
Delta were suspended for minor lapses
and the payment of their salaries were
purportedly delayed. Eventually
respondents were barred by petitioner
from reporting for work; thus, the former
claimed constructive dismissal.
Respondents filed a case for illegal
dismissal, underpayment/non-payment of
wages and benefits plus damages against
petitioner. LA dismissed the case without
prejudice while waiting for the decision of
the Secretary of Labor on the same issue
of the existence of an E-ER relationship
between petitioner and respondents. On
appeal to the NLRC, respondents raised
the issue of E-ER relationship and
submitted the following to prove the
existence of such relationship, to wit: time
cards, identification cards, payroll, a show
cause order of the station manager to
respondent Danny Oberio and memoranda
either noted or issued by said manager.
Petitioner, on the other hand, did not
present any documentary evidence in its
behalf and merely denied the allegations
of respondents. It claimed that the radio
station pays for the drama recorded by
piece and that it has no control over the
conduct of respondents.
ISSUE:
1. WON respondents were employees of
petitioner
2. WON their dismissal was illegal
HELD:
1. Yes. Petitioner failed to controvert with
substantial evidence the allegation of
respondents that they were hired by the
former on various dates from 1974 to
1997. If petitioner did not hire
respondents and if it was the director
alone who chose the talents, petitioner
could have easily shown, being in
possession of the records, a contract to
such effect. However, petitioner merely
relied on its contention that respondents
were piece rate contractors who were paid
by results. Note that under Policy
Instruction No. 40, petitioner is obliged to
execute the necessary contract specifying
the nature of the work to be performed,
rates of pay, and the programs in which
they will work. Moreover, project or
contractual employees are required to be
apprised of the project they will undertake
under a written contract. This was not
complied with by the petitioner, justifying
the reasonable conclusion that no such
contracts exist and that respondents were
in fact regular employees. In ABS-CBN v.
Marquez,18 the Court held that the failure
of the employer to produce the contract
mandated by Policy Instruction No. 40 is
indicative that the so called talents or
project workers are in reality, regular
employees.

Moreover, the engagement of respondents
for a period ranging from 2 to 25 years
and the fact that their drama programs
were aired not only in Bacolod City but
also in the sister stations of DYWB in the
Visayas and Mindanao areas, undoubtedly
show that their work is necessary and
indispensable to the usual business or
trade of petitioner. As to the payment of
wages, it was petitioner who paid the
same as shown by the payroll bearing the
name of petitioner company in the
heading with the respective salaries of
respondents opposite their names. Anent
the power of control, dismissal, and
imposition of disciplinary measures, which
are indicative of an employer-employee
relationship,20 the same were duly proven
2. Yes. In labor cases, the employer has
the burden of proving that the dismissal
was for a just cause; failure to show this
would necessarily mean that the dismissal
was unjustified and, therefore, illegal. In
this case, petitioner merely contended
that it was respondents who ceased to
report to work, and never presented any
substantial evidence to support said
allegation. Petitioner therefore failed to
discharge its burden, hence, respondents
were correctly declared to have been
illegally dismissed. Furthermore, if doubts
exist between the evidence presented by
the employer and the employee, the
scales of justice must be tilted in favor of
the latter – the employer must
affirmatively show rationally adequate
evidence that the dismissal was for a
justifiable cause.
OROZCO vs CA
FACTS:, PDI engaged the services of
petitioner to write a weekly column for its
Lifestyle section. She religiously submitted
her articles every week, except for a 6-
month stint in NYC when she,
nonetheless, sent several articles through
mail. Petitioner claims that her then
editor, Ms. Logarta,6 told her that
respondent Leticia Jimenez Magsanoc, PDI
Editor in Chief, wanted to stop publishing
her column for no reason at all and
advised petitioner to talk to Magsanoc
herself. Petitioner narrates Magsanoc
informed her that it was PDI Chairperson
Apostol who had asked to stop publication
of her column, but that in a telephone
conversation with Apostol, the latter said
that Magsanoc informed her (Apostol) that
the Lifestyle section already had many
columnists. On the other hand, PDI claims
that in June 1991, Magsanoc met with the
Lifestyle section editor to discuss how to
improve said section. They agreed to cut
down the number of columnists by
keeping only those whose columns were
well-written, with regular feedback and
following. In their judgment, petitioner’s
column failed to improve, continued to be
superficially and poorly written, and failed
to meet the high standards of the
newspaper. Hence, they decided to
terminate petitioner’s column. Aggrieved
by the newspaper’s action, petitioner filed
a complaint for illegal dismissal,
backwages, moral and exemplary
damages, and other money claims before
the NLRC. LA ruled in favor of petitioner.
NLRC affirmed, sustaining the LA’s
reasoning that respondent PDI exercised
control over petitioner’s work. CA set
aside the NLRC Decision and dismissed
petitioner’s Complaint. First, private
respondent admitted that she was and
[had] never been considered by petitioner
PDI as its employee. Second, it is not
disputed that private respondent had no
employment contract with petitioner PDI.
In fact, her engagement to contribute
articles for publication was based on a
verbal agreement between her and the
petitioner’s Lifestyle Section Editor.
Moreover, it was evident that private
respondent was not required to report to
the office 8 hours a day. Further, it is not
disputed that she stayed in NYC for 6
months without petitioner’s permission as
to her leave of absence nor was she given
any disciplinary action for the same.
These undisputed facts negate private
respondent’s claim that she is an
employee of petitioner.
ISSUE: WON petitioner is an employee of
PDI, and if the answer be in the
affirmative, whether she was illegally
dismissed.
HELD: Court rules in favor of
respondents. Petitioner has misconstrued
the "control test," as did the Labor Arbiter
and the NLRC.
Not all rules imposed by the hiring party
on the hired party indicate that the latter
is an employee of the former. Rules which
serve as general guidelines towards the
achievement of the mutually desired
result are not indicative of the power of
control. Thus, this Court has explained:
It should, however, be obvious that not
every form of control that the hiring party
reserves to himself over the conduct of
the party hired in relation to the services
rendered may be accorded the effect of
establishing an employer-employee
relationship between them in the legal or
technical sense of the term. A line must
be drawn somewhere, if the recognized
distinction between an employee and an
individual contractor is not to vanish
altogether. Realistically, it would be a rare
contract of service that gives
untrammelled freedom to the party hired
and eschews any intervention whatsoever
in his performance of the engagement.
Logically, the line should be drawn
between rules that merely serve as
guidelines towards the achievement of the
mutually desired result without dictating
the means or methods to be employed in
attaining it, and those that control or fix
the methodology and bind or restrict the
party hired to the use of such means. The
first, which aim only to promote the
result, create no employer-employee
relationship unlike the second, which
address both the result and the means
used to achieve it.
The main determinant therefore is
whether the rules set by the employer are
meant to control not just the results of the
work but also the means and method to
be used by the hired party in order to
achieve such results. Thus, in this case,
we are to examine the factors enumerated
by petitioner to see if these are merely
guidelines or if they indeed fulfill the
requirements of the control test.
Petitioner believes that respondents’ acts
are meant to control how she executes
her work. We do not agree. A careful
examination reveals that the factors
enumerated by the petitioner are inherent
conditions in running a newspaper. In
other words, the so-called control as to
time, space, and discipline are dictated by
the very nature of the newspaper business
itself. The Inquirer is the publisher of a
newspaper of general circulation which is
widely read throughout the country. As
such, public interest dictates that every
article appearing in the newspaper should
subscribe to the standards set by the
Inquirer, with its thousands of readers in
mind. It is not, therefore, unusual for the
Inquirer to control what would be
published in the newspaper. What is
important is the fact that such control
pertains only to the end result, i.e., the
submitted articles. The Inquirer has no
control over [petitioner] as to the means
or method used by her in the preparation
of her articles. The articles are done by
[petitioner] herself without any
intervention from the Inquirer.
Petitioner has not shown that PDI, acting
through its editors, dictated how she was
to write or produce her articles each
week. Aside from the constraints
presented by the space allocation of her
column, there were no restraints on her
creativity; petitioner was free to write her
column in the manner and style she was
accustomed to and to use whatever
research method she deemed suitable for
her purpose. The apparent limitation that
she had to write only on subjects that
befitted the Lifestyle section did not
translate to control, but was simply a
logical consequence of the fact that her
column appeared in that section and
therefore had to cater to the preference of
the readers of that section.
Contrary to petitioner’s protestations, it
does not appear that there was any actual
restraint or limitation on the subject
matter – within the Lifestyle section – that
she could write about. Respondent PDI did
not dictate how she wrote or what she
wrote in her column. Neither did PDI’s
guidelines dictate the kind of research,
time, and effort she put into each column.
In fact, petitioner herself said that she
received "no comments on her articles…
except for her to shorten them to fit into
the box allotted to her column."
Therefore, the control that PDI exercised
over petitioner was only as to the finished
product of her efforts, i.e., the column
itself, by way of either shortening or
outright rejection of the column.
WILLIAM UY CONSTRUCTION CORP.
VS. TRINIDAD
FACTS: Respondent Trinidad filed a
complaint for illegal dismissal and unpaid
benefits against petitioner William Uy
Construction Corporation. Trinidad claimed
that he had been working with the latter
company for 16 years since 1988 as
driver. He had signed several employment
contracts with the company that identified
him as a project employee although he
had always been assigned to work on one
project after another with some intervals.
Trinidad further alleged that in December
2004 petitioner company terminated him
from work after it shut down operations
because of lack of projects. He learned
later, however, that although it opened up
a project in Batangas, it did not hire him
back for that project. Petitioner company
countered that it was in the construction
business. By the nature of such business,
it had to hire and engage the services of
project construction workers, including
respondent Trinidad, whose employments
had to be co-terminous with the
completion of specific company projects.
For this reason, every time the company
employed Trinidad, he had to execute an
employment contract with it, called
Appointment as Project Worker. Petitioner
company stressed that employment
intervals or gaps were inherent in the
construction business. Consequently, after
it finished its Boni Serrano-Katipunan
Interchange Project in December 2004,
Trinidad's work ended as well. In
compliance with labor rules, the company
submitted an establishment termination
report to the DOLE.
LA dismissed Trinidad’s complaint. LA held
that, since Trinidad was a project
employee and since his company
submitted the appropriate establishment
termination report to DOLE, his loss of
work cannot be regarded as unjust
dismissal. LA found no basis for granting
Trinidad overtime pay, holiday pay, and
13th month pay. NLRC affirmed. CA
reversed.
ISSUE: WON the CA correctly ruled that
petitioner company's repeated rehiring of
respondent Trinidad over several years as
project employee for its various projects
automatically entitled him to the status of
a regular employee.
HELD: No. The CA held that, although
respondent Trinidad initially worked as a
project employee, he should be deemed to
have acquired the status of a regular
employee since petitioner company
repeatedly rehired him in its past 35
projects that lasted 16 years. The CA
explained that Trinidad's work as driver of
the company's service vehicle, dump
truck, and transit mixer was vital,
necessary, and indispensable to the
company's construction business. The
intervals between his employment
contracts were inconsequential since
stoppage in operations at the end of every
construction project was a foreseeable
interruption of work.
But the test for distinguishing a "project
employee" from a "regular employee" is
whether or not he has been assigned to
carry out a "specific project or
undertaking," with the duration and scope
of his engagement specified at the time
his service is contracted. Here, it is not
disputed that petitioner company
contracted respondent Trinidad's service
by specific projects with the duration of
his work clearly set out in his employment
contracts. He remained a project
employee regardless of the number of
years and the various projects he worked
for the company
D.M. CONSUNJI, INC. v. JAMIN
FACTS: Petitioner D.M. Consunji, Inc.
(DMCI), a construction company, hired
respondent Estelito L. Jamin as a laborer.
Sometime in 1975, Jamin became a
helper carpenter. Since his initial hiring,
Jamins employment contract had been
renewed a number of times. On March 20,
1999, his work at DMCI was terminated
due to the completion of the SM Manila
project. This termination marked the end
of his employment with DMCI as he was
not rehired again. Jamin filed a
complaintfor illegal dismissal, with several
money claims (including attorneys fees),
against DMCI and its President/General
Manager, David M. Consunji. Jamin
alleged that DMCI terminated his
employment without a just and authorized
cause at a time when he was already 55
years old and had no independent source
of livelihood. He claimed that he rendered
service to DMCI continuously for almost
31 years. DMCI denied liability. It argued
that it hired Jamin on a project-to-project
basis, from the start of his engagement in
1968 until the completion of its SM Manila
project on March 20, 1999 where Jamin
last worked. With the completion of the
project, it terminated Jamins employment.
The LA dismissed the complaint for lack of
merit. On appeal, the NLRC affirmed the
decision of the LA. On further appeal, the
CA reversed the NLRC decision and ruled
that Jamin was a regular employee.
Hence, DMCI seeks a reversal of the CA
rulings on the ground that the appellate
court committed a grave error in annulling
the decisions of the labor arbiter and the
NLRC.
ISSUE: WON Jamin is a regular employee
HELD: Yes. 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. 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. While the history of Jamins
employment (schedule of projects) relied
upon by DMCI shows a gap of almost four
years in his employment for the period
between July 28, 1980 (the supposed
ARO vs NLRC
completion date of the Midtown Plaza
project) and June 13, 1984 (the start of FACTS: Several employees of private
the IRRI Dorm IV project), the gap was respondent Benthel Development
caused by the companys omission of the Corporation, including the petitioners, filed
three projects above mentioned. To a Complaint for illegal dismissal with
reiterate, Jamins employment history with various money claims and prayer for
DMCI stands out for his continuous, damages against the latter. LA found
repeated and successive rehiring in the private respondent guilty of illegal
companys construction projects. In all the dismissal and ordering it to pay its
38 projects where DMCI engaged Jamins employees separation pay.
services, the tasks he performed as a
carpenter were indisputably necessary and
desirable in DMCIs construction business.
The employees, including the petitioners
He might not have been a member of a
herein, appealed to the NLRC. NLRC
work pool as DMCI insisted that it does
favored petitioners and affirmed the
not maintain a work pool, but his
decision of LA with modification that
continuous rehiring and the nature of his
private respondent pay backwages
work unmistakably made him a regular
computed from the respective dates of
employee. Further, as we stressed in
dismissal until finality of the decision.
Liganza, respondent capitalizes on our
Private respondent filed MR to NLRC.
ruling in D.M. Consunji, Inc. v. NLRC
NLRC denied the motion ruling that
which reiterates the rule that the length of
private respondent failed to establish the
service of a project employee is not the
date of the completion of the project.
controlling test of employment tenure but
Private respondent went to CA. It was
whether or not the employment has been
dismissed. The employees, including the
fixed for a specific project or undertaking
petitioners, upon the finality of the Court’s
the completion or termination of which
resolution, filed a Motion for Execution
has been determined at the time of the
before the LA of its decision. The LA
engagement of the employee."
ordered for the issuance of a writ of
execution directing the computation of the
awards. Private respondent filed an appeal
"Surely, length of time is not the from the said Order with an urgent prayer
controlling test for project employment. for the issuance of a TRO and/or
Nevertheless, it is vital in determining if preliminary injunction with public
the employee was hired fora specific respondent NLRC. It was denied.
undertaking or tasked to perform
functions vital, necessary and
indispensable to the usual business or
Private respondent appealed to NLRC
trade of the employer. Here, private
contending that the computation for
respondent had been a project employee
backwages must be only until the
several times over. His employment
completion of the project and not until the
ceased to be coterminous with specific
finality of the decision. NLRC affirmed the
projects when he was repeatedly re-hired
Order of LA but reduced the total amount
due to the demands of petitioners
it has previously rendered. Private
business.Without doubt, Jamins case fits
respondent filed a petition for certiorari
squarely into the employment situation
with the CA, alleging NLRC committed
just quoted.
grave abuse of discretion. The CA granted
the petition, therefore, annulling and
setting aside the decision and resolution
of the NLRC as to the award for
backwages and remanded the case to the
same public respondent NLRC for the
proper computation of the backwages due
to each of the petitioners herein. But the
petitioners did not agree with the
reduction made by the NLRC, hence, the
present petition.
ISSUE: WON petitioners were project
employees or regular employees. Thus,
how should the backwages be computed.
HELD: Petitioners are project employees.
According to the CA, petitioners are
project employees as found by LA because
they were hired for the construction of the
Cordova Reef Village Resort in Cordova,
Cebu, which was later on affirmed by the
NLRC. The only discrepancy is the Order
of the NLRC that petitioners are entitled to
backwages up to the finality of its
decision, when as project employees,
private respondents are only entitled to
payment of backwages until the date of
the completion of the project. In a later
resolution on private respondent’s MR, the
NLRC changed its findings by ruling that
petitioners herein were regular employees
and, therefore, entitled to full backwages,
until finality of the decision, citing that
petitioners’ repeated rehiring over a long
span of time made them regular
employees.
Article 280 of the Labor Code
distinguishes a “project employee” from a
“regular employee,” thus:
Article 280. Regular and Casual
Employment − The provisions of written
agreement to 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.
An employment shall be deemed to be
casual if it is not covered by the preceding
paragraph: Provided, That, any employee
who has rendered at least one year
service, whether such service is
continuous or broken, shall be considered
a regular employee with respect to the
activity in which he is employed and his
employment shall continue while such
activity exists.
The principal test for determining whether
particular employees are properly
characterized as “project employees” as
distinguished from “regular employees” is
whether or not the project employees
were assigned to carry out a “specific
project or undertaking,” the duration and
scope of which were specified at the time
the employees were engaged for that
project. Such duration, as well as the
particular work/service to be performed, is
defined in an employment agreement and
is made clear to the employees at the
time of hiring.
The length of service or the re-hiring of
construction workers on a project-to-
project basis does not confer upon them
regular employment status, since their re-
hiring is only a natural consequence of the
fact that experienced construction workers
are preferred. Employees who are hired
for carrying out a separate job, distinct
from the other undertakings of the
company, the scope and duration of which
has been determined and made known to
the employees at the time of the
employment , are properly treated as
project employees and their services may
be lawfully terminated upon the
completion of a project. Should the terms
of their employment fail to comply with
this standard, they cannot be considered
project employees.
In this case, petitioners did not have that
kind of agreement with respondents.
Neither did they inform respondents of the
nature of the latter’s work at the time of
hiring. Hence, for failure of petitioners to
substantiate their claim that respondents
were project employees, SC declare them
as regular employees.
The Court markedly stressed the
importance of the employees’ knowing
consent to being engaged as project
employees when it clarified that “there is
no question that stipulation on
employment contract providing for a fixed
period of employment such as “project-to-
project” contract is valid provided the
period was agreed upon knowingly and
voluntarily by the parties, without any
force, duress or improper pressure being
brought to bear upon the employee and
absent any other circumstances vitiating
his consent”
employment of project employees cannot
be terminated prior to expiration.
Otherwise, they shall be entitled to
reinstatement with full backwages.
However, if the project or work is
completed during the pendency of the
ensuing suit for illegal dismissal, the
employees shall be entitled only to full
backwages from the date of the
termination of their employment until the
actual completion of the work.
Because there was no showing then that
the project for which their services were
engaged had already been completed, the
private respondents were illegally
dismissed and thus entitled to backwages.
While it may be true that in the
proceedings below the date of completion
of the project for which the private
respondents were hired had not been
clearly established, it constitutes grave
abuse of discretion on the part of NLRC for
not determining for itself the date of said
completion instead of merely ordering
payment of backwages until finality of its
decision.

CA was correct in finding that petitioners

were project employees. It is not
disputed that petitioners were hired for
the construction of the Cordova Reef
Village Resort in Cordova, Cebu. By the
nature of the contract alone, it is clear
that petitioners’ employment was to carry
out a specific project.

As project employees, private respondents

are only entitled to payment of the
backwages until the date of the
completion of the project. It is settled
that, without a valid cause, the