G.R. No. 75819 - Ong vs. Court of Appeals

Petitioners, represented by ALU-TUCP and consisting of 13 employees, were employed by National Steel Corporation (NSC) in relation to its Five Year Expansion Program (FAYEP I & II).
Their employment involved various engineering and related positions such as Engineer I, Chainman, Utilityman, Engineer Assistant, Survey Aide, Machine Operator, among others.
They were separated from NSC service between 1991-1992.

On July 5, 1990, petitioners filed complaints for unfair labor practice, regularization, and monetary benefits before the NLRC, Sub-Regional Arbitration Branch XII, Iligan City.
Complaints were consolidated, and the Labor Arbiter, in a decision dated June 7, 1991, declared petitioners as regular project employees entitled to the salary of regular employees under the collective bargaining agreement and ordered payment of salary differentials.
Both parties appealed to the NLRC:

The NLRC, in resolutions dated January 8, 1993, and February 15, 1993, held petitioners to be project employees whose employment was co-terminous with the project’s completion, and revoked salary differential benefits for lack of basis.

Article 280 of the Labor Code defines regular and project employment, establishing that employment fixed for a specific project with determined completion is considered project employment.
Petitioners argued:

Their jobs were necessary and desirable to NSC’s main business of steelmaking.
They had rendered more than six years of service, entitling them to regular employee status under the law.

NSC’s Five Year Expansion Program comprised distinct component projects (e.g., Cold Rolling Mill Expansion, Billet Steel-Making Plant, installation of equipment) undertaken in-house, separate from ordinary business operations.
Employees assigned to these projects performed tasks unrelated to the regular steel manufacturing activities, and the projects had specific durations known at hiring.

The employment was fixed for specific undertakings distinct from NSC’s usual steelmaking business.
Petitioners’ designation as project employees was made in good faith corresponding to known project durations.
Length of service does not convert project employees into regular employees; the one-year regularization rule only applies to casual employees.

Whether petitioners are regular employees of NSC or project employees assigned to specific undertakings.
Whether length of service exceeding one year entitles the petitioners to regular employee status notwithstanding their designation as project employees.
Whether the NLRC committed grave abuse of discretion or jurisdictional error in classifying the employees and denying them regular employee benefits.