Facts:

The case involves petitioners Rodrigo Bordeos, Reynaldo Ceruma, Edgar Concina, Salvador Consuelo, Godofredo Cas IV, Lorenzo Clarino, Lorenzo Belo, Romeo Bueno, and Leo Carullo, who were formerly employed as project workers by Build-O-Weld Services Co. (BOWSC). They claimed that BOWSC was a labor-only contractor for Philippine Geothermal, Inc. (PGI), making them regular employees of PGI who were wrongfully terminated. The events leading to the case began when PGI, engaged in geothermal energy exploration, contracted BOWSC to perform specific tasks at its project sites in Laguna and the Bicol Region. The Job Contracting Agreement between PGI and BOWSC outlined the responsibilities of both parties, emphasizing BOWSC's independence as a contractor. The petitioners were hired intermittently as pipe fitters and welders, and their employment was terminated based on the completion of projects. They filed complaints with the Regional Arbitration Branch in Legaspi City, seeking ...

Facts:

Background of the Case

• Petitioners (Rodrigo Bordeos, Reynaldo Ceruma, Edgar Concina, Salvador Consuelo, Godofredo Cas IV, Lorenzo Clarino, Lorenzo Belo, Romeo Bueno, and Leo Carullo) were formerly engaged as project employees of Build-O-Weld Services Co. (BOWSC).
• They claimed that BOWSC was a labor-only contractor of Philippine Geothermal, Inc. (PGI), and therefore, they were regular employees of PGI who were wrongfully terminated.

Nature of PGI’s Business

• PGI is engaged in the exploration and development of geothermal energy, with projects in Laguna and Tiwi, Albay.
• Due to the nature of its operations, PGI engaged contractors like BOWSC to perform specific tasks.

Job Contracting Agreement

• PGI and BOWSC entered into a "Job Contracting Agreement," where BOWSC was described as an independent contractor responsible for recruiting, hiring, and supervising its employees.
• The agreement stipulated that BOWSC would provide tools, equipment, and supervision, while PGI would only control the end result of the work.

Petitioners’ Employment

• Petitioners were hired by BOWSC as pipe fitters and welders for PGI’s projects.
• Their employment was intermittent, with periods of termination and rehiring based on project needs.
• They were terminated between May 31, 1991, and July 31, 1991, due to the completion or slowing down of PGI’s projects.

Claims of Petitioners

• Petitioners argued that they were regular employees of PGI because:
  1. They had rendered more than one year of service.
  2. Their work was necessary and essential to PGI’s business.
  3. BOWSC was a labor-only contractor lacking substantial capital and tools.
  4. PGI exercised control over their work.

Respondents’ Defense

• BOWSC and PGI maintained that:
  1. Petitioners were employees of BOWSC, not PGI.
  2. BOWSC was an independent contractor with sufficient capital and tools.
  3. PGI did not control or supervise the petitioners.

Labor Arbiter’s Decision

• The labor arbiter ruled that petitioners were project employees of BOWSC and were validly terminated upon project completion.
• However, BOWSC was ordered to pay financial assistance to petitioners as an equitable measure.

NLRC’s Resolution

• The National Labor Relations Commission (NLRC) affirmed the labor arbiter’s decision, dismissing petitioners’ appeal.

Issue:

1. Whether BOWSC was an independent contractor or a labor-only contractor.
2. Whether petitioners were project employees or regular employees.
3. Whether petitioners were legally dismissed.
4. Whether the NLRC committed grave abuse of discretion in its findings.

Ruling:

The Supreme Court dismissed the petition and affirmed the NLRC’s resolution, holding that:

1. BOWSC was an independent contractor, not a labor-only contractor, as it had substantial capital, tools, and equipment, and exercised control over its employees.
2. Petitioners were project employees of BOWSC, not regular employees of PGI, as their employment was tied to specific projects and was intermittent.
3. Petitioners’ termination was legal since their employment was co-terminous with the completion of the projects.
4. The NLRC did not commit grave abuse of discretion, as its findings were supported by substantial evidence.

Ratio:

1. Independent Contractor vs. Labor-Only Contractor:

   • BOWSC met the criteria of an independent contractor under Article 106 of the Labor Code and the Omnibus Rules. It had substantial capital, tools, and equipment, and exercised control over its employees.
   • The requirement for petitioners to submit daily time records and manpower progress reports did not indicate PGI’s control over their work but was merely for administrative purposes.

2. Project Employees vs. Regular Employees:

   • Petitioners were hired for specific projects and were terminated upon project completion, which is characteristic of project employment.
   • Their intermittent employment and lack of inclusion in a work pool further supported their classification as project employees.

3. Legality of Dismissal:

   • As project employees, petitioners’ employment was validly terminated upon the completion of the projects or phases thereof, in accordance with Policy Instructions No. 20.

4. Burden of Proof:

   • Petitioners failed to substantiate their claims that BOWSC was a labor-only contractor or that PGI exercised control over their work.
   • The NLRC’s factual findings, supported by substantial evidence, are binding and conclusive.

5. Equity Consideration:

   • The financial assistance awarded to petitioners by the labor arbiter, which BOWSC did not appeal, was upheld as an equitable measure.

Conclusion:

The Supreme Court upheld the NLRC’s resolution, ruling that petitioners were project employees of BOWSC, an independent contractor, and were validly terminated upon project completion. The petition was dismissed for lack of merit.