Case Summary (G.R. No. 109902)
Petitioners' Employment Details and Legal Action
The petitioners had varying periods of employment with NSC between 1981 and 1992, performing various engineering and technical roles. On July 5, 1990, they filed complaints with the NLRC for unfair labor practices, regularization, and monetary benefits. The Labor Arbiter initially ruled that the petitioners were regular project employees entitled to salaries comparable to regular employees under the collective bargaining agreement. Both parties appealed this decision.
NLRC's Resolution on the Nature of Employment
The NLRC, in its January 8, 1993, and February 15, 1993 resolutions, affirmed that the petitioners were project employees assigned to specific projects under NSC’s expansion program, discriminating them from regular employees. The NLRC set aside the award of regular employee benefits due to lack of legal and factual basis, emphasizing that the petitioners were employed for projects separate from NSC’s primary steel manufacturing business.
Governing Law: Article 280 of the Labor Code
Article 280 of the 1987 Philippine Labor Code defines the distinction between regular and project employment. It states that employment is regular when performing activities usually necessary to the employer’s business, except when the work is fixed for a specific project or seasonal in nature. The law also provides that an employee who has rendered at least one year of service is regular regarding the activity, except for project employees, whose employment is co-terminous with the project’s lifespan. The NLRC and the Court relied heavily on this provision in deciding the case.
Core Issue: Project Employees vs. Regular Employees
The essential legal question revolved around whether the petitioners should be classified as regular employees or project employees. This classification is crucial because project employees’ tenure terminates with the completion of the project for which they were hired, while regular employees have the right to continued employment protected by the Labor Code’s provisions on termination.
Defining "Project" in Labor Employment Context
A "project" could either be: 1) a distinct, identifiable job within the normal business of the employer with a defined lifespan, such as specific construction projects by a construction company, or 2) a separate undertaking not part of the employer’s usual operations. In this case, NSC’s Five Year Expansion Program, which included several component projects (e.g., construction of mills and installation of machinery), qualified as a separate undertaking distinct from regular steel manufacturing.
NSC’s Execution of the Expansion Program and Employee Assignment
Instead of outsourcing construction and installation work, NSC chose to internally manage these projects, hiring employees specifically for the FAYEP components. These project employees were assigned tasks clearly distinct from NSC’s regular business activities like steel production and sales operations. The Court found no evidence that petitioners were deployed to usual steelmaking operations but were clearly engaged only in project-specific tasks.
The NLRC and Court’s Affirmation on Project Employee Status
Both the NLRC and the Supreme Court upheld the classification of petitioners as project employees. They emphasized that the employment was fixed for specific activities within defined timelines. The length of service, regardless of surpassing one year, was not dispositive since the project’s completion defined the term of employment. The Court relied on existing jurisprudence affirming that project employees’ status depends on the nature and duration of
...continue readingCase Syllabus (G.R. No. 109902)
Facts of the Case
- Petitioners were employees of National Steel Corporation (NSC) hired in connection with the Five Year Expansion Program (FAYEP I & II) of NSC.
- Petitioners were employed for varying lengths of time, mostly between 1982 and 1992, working as engineers, assistants, machine operators, and other positions tied to the specific expansion projects.
- Petitioners filed separate complaints for unfair labor practice, regularization, and monetary benefits before the National Labor Relations Commission (NLRC) through its Sub-Regional Arbitration Branch XII in Iligan City.
- The Labor Arbiter ruled that petitioners were regular project employees entitled to regular employee salary and benefits while assigned to the project.
- Both parties appealed; NSC asserted that petitioners were project employees attached to a specific undertaking with determined completion.
- The NLRC declared petitioners to be project employees and denied entitlements to benefits equal to those of regular employees.
- Petitioners assailed NLRC’s resolutions by filing a Petition for Certiorari before the Supreme Court.
Legal Issue Presented
- Whether the petitioners are project employees or regular employees of NSC in relation to their employment during the Five Year Expansion Program.
- Whether the duration of employment exceeding one year or several years automatically confers regular employee status to petitioners under Article 280 of the Labor Code.
Applicable Law
- Article 280, Labor Code of the Philippines:
- Defines regular employment as where an employee is engaged to perform activities necessary or desirable to the usual business/trade of the employer.
- Specifies that employment fixed for a specific project or undertaking, whose completion or termination is determined at engagement, constitutes project employment.
- Introduces exception for seasonal work.
- Provides that any employee with at least one year of service shall be deemed regular employee only within the context of casual employment.
- Case law reinforcing interpretation of Article 280, including Mercado, Sr. vs. NLRC (201 SCRA 332) and Sandoval Shipping, Inc. vs. NLRC (136 SCRA 674).
Court’s Analysis on the Nature of Employment
- The Five Year Expansion Program (FAYEP I & II) consisted of multiple distinc