Title
Archbuild Masters and Construction, Inc. vs. National Labor Relations Commission
Case
G.R. No. 108142
Decision Date
Dec 26, 1995
Rogelio Cayanga, a project employee, was illegally dismissed by ARMACON due to inconsistent reasons (project completion vs. absences) without substantial evidence, violating labor laws and due process.
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Case Digest (G.R. No. 108142)

Facts:

Employment Context:

  • Petitioners, Archbuild Masters and Construction, Inc. (ARMACON), and its president Joaquin C. Regala, entered into a contract with the U.S. government in August 1988 to lay water pipes inside the U.S. Naval Base in Subic, Zambales.
  • Rogelio Cayanga was hired on 20 March 1989 as a driver for the Subic project, with his employment papers specifying his role.

Termination of Employment:

  • In December 1989, petitioners claimed that the phase of work for which Cayanga was hired was nearing completion, leading to a reduction in the workforce.
  • On 26 December 1989, petitioners posted a list of employees, including Cayanga, whose services were no longer needed due to the project's phase completion.
  • Petitioners sought clearance from the Regional Labor Office to terminate Cayanga and six other employees, citing the reduction in manpower.

Cayanga’s Allegations:

  • Cayanga filed a complaint for illegal dismissal on 22 January 1990, arguing that his dismissal was in bad faith.
  • He claimed that the real reason for his termination was his alleged absences without leave, not project completion.
  • Cayanga asserted that he was initially told his dismissal was due to absences, but later found his name on the termination list citing project completion.
  • He also argued that some dismissed employees were rehired or replaced, undermining the claim of project completion.

Labor Arbiter and NLRC Decisions:

  • The Labor Arbiter dismissed Cayanga’s complaint, ruling that his separation was valid and not done in bad faith, but ordered payment of unpaid wage differentials.
  • The NLRC reversed the Labor Arbiter’s decision, finding Cayanga illegally dismissed and ordering back wages from 1 January 1990 until the closure of the Subic Naval Base.
  • The NLRC noted inconsistencies in petitioners’ reasons for dismissal (project completion vs. shutdown/retrenchment) and the lack of substantial evidence to prove project completion.

Issue:

  1. Whether Rogelio Cayanga was illegally dismissed by ARMACON.
  2. Whether the termination of Cayanga’s employment complied with the substantive and procedural requirements of due process.
  3. Whether the NLRC erred in reversing the Labor Arbiter’s decision.

Ruling:

The Supreme Court affirmed the NLRC’s decision, holding that Rogelio Cayanga was illegally dismissed. The Court found that:

  • Petitioners failed to provide substantial evidence to prove the proximate completion of the Subic project, which was the basis for Cayanga’s dismissal.
  • The inconsistencies in petitioners’ reasons for dismissal (project completion vs. shutdown/retrenchment) cast doubt on the validity of the termination.
  • Employers must prove the actual basis for a project employee’s dismissal, and a mere claim of project completion is insufficient without adequate proof.
  • The dismissal violated Cayanga’s right to security of tenure and due process under the Labor Code and the Constitution.

Ratio:

  1. Project Employment and Termination:

    • Project employees, like Cayanga, are hired for specific tasks or phases of a project, and their employment is coterminous with the completion of the project or phase.
    • Employers may reduce the workforce as the project nears completion, but the termination must comply with legal requirements.
  2. Burden of Proof in Dismissal Cases:

    • The burden of proving the lawful dismissal of an employee lies with the employer.
    • Employers must provide substantial evidence to justify the termination, especially when the employee challenges the grounds for dismissal.
  3. Due Process and Security of Tenure:

    • Even project employees are entitled to security of tenure and due process.
    • Termination must be for a just and authorized cause, and the employee must be given proper notice and an opportunity to be heard.
  4. Inconsistencies in Grounds for Dismissal:

    • Inconsistent explanations for dismissal (e.g., project completion vs. shutdown/retrenchment) undermine the employer’s credibility and suggest bad faith.
  5. Policy Instruction No. 20:

    • While Policy Instruction No. 20 allows for the termination of project employees upon the completion of a project phase, employers must still comply with legal requirements and provide adequate proof of project completion.

Conclusion:

The Supreme Court denied the petition for certiorari, affirming the NLRC’s ruling that Rogelio Cayanga was illegally dismissed. Petitioners were ordered to pay Cayanga back wages from 1 January 1990 until the closure of the Subic Naval Base.


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