G.R. No. 113166 - Samson vs. National Labor Relations Commission

Petitioner Ismael Samson was employed by private respondent Atlantic Gulf and Pacific Co., Manila, Inc. (AG&P) since April 1965, working in various construction projects primarily as a rigger—from laborer to rigger foreman.
From 1977 to 1985, he was assigned to overseas projects in Kuwait and Saudi Arabia.
Throughout his long service, his roles and tasks remained essentially the same, indicating a continuity in the nature of his work.

On November 5, 1989, petitioner filed a complaint for the conversion of his employment status from project employee to regular employee.
The complaint was later amended to include claims of underpayment; non-payment of premium pay for holidays and rest days; refund of reserve fund; and a 10% attorney’s fee upon regularization.
Petitioner argued that his continuous and considerable length of service warranted regularization and all attendant benefits.

On June 30, 1993, Labor Arbiter Felipe T. Garduque II ruled in favor of petitioner by declaring him a regular employee.
The Labor Arbiter found that petitioner was not free to leave at will and was continuously rehired, signifying his membership in a work pool that transcended a mere project-based engagement.
The decision emphasized that non-compliance by AG&P with the reporting requirement (as mandated under DOLE Policy Instruction No. 20) on termination of a project indicated a de facto employment relationship beyond a fixed-term engagement.

On November 29, 1993, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision and dismissed the complaint, holding that the evidence showed petitioner was engaged for a fixed and determinable period.
The NLRC relied on several points:

The evidence drawn from the project employment contracts indicated that each employment for every project was separate and distinct.
Petitioner’s failure to demonstrate that he was not free to seek other employment undermined the Labor Arbiter’s findings.
The NLRC argued that Department Order No. 19, issued in April 1993, had superseded Policy Instruction No. 20, thus altering the indicator of regularity based on the reporting requirement.

Private respondent further contended that the repeated rehiring does not automatically confer regular status, asserting that the nature of project-based work in the construction industry justified fixed-term employment contracts.

Petitioner and the Solicitor General argued that Department Order No. 19 could not be applied retroactively since, at the time of the complaint filing in 1989 and throughout petitioner’s employment, Policy Instruction No. 20 was in force.
Conversely, private respondent maintained that the new order permitted rehiring and that its provisions should govern the employment classification.
Additionally, there was a procedural issue regarding the non-exhaustion of administrative remedies, namely, the absence of a motion for reconsideration of the NLRC decision before the petition was filed.

Whether petitioner Ismael Samson should be classified as a regular employee or merely as a project employee of AG&P.

Whether the application of Department Order No. 19 (issued in April 1993) should be given retroactive effect over the earlier Policy Instruction No. 20 under which petitioner was employed.
Whether the continuous rehiring and the nature of petitioner’s work are sufficient indicators of regular employment despite the existence of project-based contracts.
Whether the failure to exhaust all administrative remedies (i.e., filing a motion for reconsideration) should bar the petition, given that the central issue was one of law.