G.R. No. 249092 - Serrano vs. Loxon Philippines, Inc.

Loxon Philippines Inc. is engaged in building management, supplying, installing, and maintaining devices such as smoke detectors, fire alarms, sprinklers, and CCTV cameras.
In 1994, Armando N. Serrano was hired by Loxon as a Helper Service Technician responsible for installations and maintenance of the company’s equipment.
Over a span of 21 years, Armando was continuously and repeatedly engaged for various projects, evidencing a long-term relationship with Loxon despite successive fixed-term or project-based contracts.

Armando was assigned to several projects over the years with specified durations such as:

PCIB Tower - FBS Project (1996-1997, 1997-1999)
NWH, HIM, PRC - FAS Servicing Project (1999)
MSH, TSP FAS Servicing Project (2000)
SVC, HIM, NWH, ROB & BAS System Project (2000-2001)
And various subsequent projects including those for Ayala Center and New World Hotel projects up to 2015.

Despite the project-specific terminology in his engagements, the tasks performed by Armando were inherent to the company’s core business.

On December 12, 2015, Loxon required all employees, including Armando, to sign a document stating that their current contract would expire at the end of December 2015, and that re-hiring would be through a new three-month contract contingent upon additional requirements (e.g., submission of NBI Clearance and Medical Certification).
Armando refused to sign the document on the ground that his long tenure warranted his status as a regular employee.
Following his refusal, Armando complied partially by submitting his NBI Clearance and Medical Certificate on January 12, 2016, but thereafter was left without work assignments and repeatedly sent between departments with no clarification regarding his employment status.
With no resolution in sight, Armando filed a complaint for illegal dismissal, alleging that his termination on the basis of non-compliance with the new contract requirements was unjustified.

The LA dismissed Armando’s complaint, finding that he was part of the regular work pool of Loxon and was merely subjected to the expiration of his employment contract rather than an act of dismissal.
The LA noted that project-based contracts, with requirements such as updating employee files, were valid exercises of management prerogative.
However, the LA ordered Loxon to give Armando priority re-employment.

The NLRC affirmed the LA’s ruling by concluding that Armando was a project employee whose contract had naturally expired after the project period.
Emphasis was placed on the contractual terms indicating his engagement for specific projects and the employer’s compliance with DOLE Department Order No. 19.
The NLRC ruled that Armando’s long service did not alter his status as a project employee.

The CA upheld the NLRC’s decision based on the clear provisions of the “Kontrata sa Pagtatrabaho sa Proyekto” signed by Armando.
The CA found no evidence of fraud, deceit, or coercion in the signing of the quit claim and maintained that his refusal to sign a new contract merely disqualified him from obtaining a subsequent project contract.

Armando petitioned, contending that he was in fact a regular employee due to decades of continuous engagement and that the repeated use of project contracts was a scheme to circumvent his regularization.
Loxon, through its comments, maintained that Armando was hired for specific projects with clear limited term durations.

Whether Armando N. Serrano is a regular employee of Loxon Philippines Inc. or a project employee engaged on fixed-term contracts.

Whether Armando’s dismissal on the basis of his refusal to sign a new three-month employment contract constitutes an illegal dismissal.
Whether the continuous re-hiring for project-based assignments, despite his long service, was used to avoid regularization in violation of principles of security of tenure.

Whether Loxon complied with the requirements under Department Order No. 19 concerning the termination of project employment.
The significance of the "Kontrata sa Pagtatrabaho sa Proyekto" in clarifying the nature of Armando’s employment.