Title
Filipinas Pre-Fabricated Building Systems Inc. vs. Puente
Case
G.R. No. 153832
Decision Date
Mar 18, 2005
Roger Puente, a project employee, was illegally dismissed before project completion, entitling him to reinstatement with back wages or compensation for unexpired employment.

Case Summary (G.R. No. 186983)

Petitioner, Respondent, and Place of Work

Petitioner-employer: construction company (Filsystems) with plant at No. 69 Industria Road, Bagumbayan, Quezon City.
Respondent-employee: originally hired June 12, 1989 as an “installera,” later promoted to mobile crane operator; last assigned to the World Finance Plaza project, Meralco Ave., Ortigas Center, Pasig City, per the last employment contract.

Key Dates and Procedural Posture

  • Employment began: June 12, 1989.
  • Dismissal claimed by employer: October 1, 1999.
  • Complaint for illegal dismissal filed by respondent: November 18, 1999.
  • Labor Arbiter dismissed complaint; NLRC affirmed dismissal; Court of Appeals reversed and declared respondent a regular employee and ordered reinstatement with back wages and 10% attorney’s fees.
  • Petition for review to the Supreme Court (G.R. No. 153832) filed and decided by the Supreme Court on March 18, 2005. Because the decision date is after 1990, the 1987 Constitution is the constitutional backdrop.

Applicable Law and Normative Standards

  • 1987 Constitution (as the governing constitutional framework).
  • Article 280 of the Labor Code (definition of regular and casual employment and the exception for employment fixed for a specific project or undertaking).
  • Department of Labor and Employment (DOLE) Department Order No. 19, Series of 1993 (classification of construction employees into project and non-project employees and indicators of project employment, including reportorial requirements and the concept of a “day certain”).
  • Relevant judicial precedent cited in the decision (e.g., D.M. Consunji, Inc. v. NLRC) establishing that the controlling test for project employment is whether employment was fixed for a specific project or undertaking whose completion/termination was determinable at time of engagement, and that length of service is not the controlling factor.

Facts Found by the Lower Bodies and by the Court of Appeals

Respondent's factual assertions: continuous employment for ten years at the company plant performing maintenance on mobile cranes, not dependent on project completion; dismissal in 1999 as a project employee.
Petitioners' assertions and proof: respondent had multiple written employment contracts for specific projects, employment expressly stated to be "project-to-project" and coterminous with project or phase completion; respondent’s last contract (accepted August 26, 1996) identified position, project name (World Finance Plaza), location, and assignment (lifting & hauling of materials / phase of work), and stated employment was for the duration of the project/phase; DOLE termination reports for project employees were regularly filed by petitioner; corroborative evidence included an affidavit of Eduardo Briagas and respondent’s Travel Trip Reports showing work at World Finance Plaza.

Labor Arbiter and NLRC Rulings

Labor Arbiter: dismissed respondent’s complaint for illegal dismissal for lack of merit, awarding only pro rata 13th month pay and attorney’s fees.
NLRC: dismissed respondent’s appeal and motion for reconsideration, effectively affirming the Labor Arbiter’s dismissal of the complaint.

Court of Appeals Ruling

The Court of Appeals reversed the NLRC and Labor Arbiter, concluding that respondent’s employment contracts did not specify the duration for each project as required by Article 280 and that respondent had been assigned at the company plant maintaining mobile cranes for ten continuous years—thus performing work usual and necessary to the employer’s business—warranting classification as a regular employee. The CA ordered reinstatement and back wages plus 10% attorney’s fees.

Issues Presented to the Supreme Court

The petitioners raised principal issues: (1) whether the Court of Appeals erred in finding that respondent’s employment contracts lacked specified duration and in finding respondent worked at the company plant rather than project sites; (2) whether respondent was a regular employee rather than a project employee; (3) whether the CA erred in entertaining certiorari and annulling NLRC decisions; (4) whether the CA erred in rejecting the employer’s claimed retrenchment/redeployment defense; and (5) whether reinstatement with full back wages and attorney’s fees was appropriate.

Standard of Review on Factual Findings

The Supreme Court noted the general rule that factual findings of the Court of Appeals are binding, but it recognized an exception when the factual findings of the CA conflict with those of the NLRC or the trial court. Because the NLRC and the CA reached incongruent findings as to respondent’s status, the Supreme Court was constrained to resolve the factual question.

Analysis: Project Employee Versus Regular Employee

The Court applied Article 280 and DOLE Department Order No. 19 (1993). DOLE Order No. 19 enumerates indicators of project employment, including determinable duration, explicit contractual definition of duration and work, connection of work to a particular project, freedom to offer services elsewhere when not engaged, and DOLE reportorial compliance. The Supreme Court emphasized precedent holding that length of service is not the controlling test; the pivotal test is whether employment was fixed for a specific project or undertaking whose completion or termination was determinable at engagement.

The Court found that respondent’s employment contracts expressly provided that tenure depended on the duration of the project or phase; the last contract explicitly identified World Finance Plaza as the project, set the assignment (lifting & hauling of materials—a defined phase), and stated employment was project-to-project and coterminous with project/phase completion. Documentary and testimonial evidence (Travel Trip Reports, the affidavit of Briagas, and DOLE termination reports) corroborated that respondent worked at the World Finance Plaza site. The Court further noted respondent’s own complaint specified his place of work as “PROJECT TO PROJECT.” Therefore, despite the absence of specific calendar dates in the contract, the contract and supporting evidence established a “day certain” (completion of the designated phase) as contemplated by DOLE Order No. 19 and Article 280. Consequently, respondent was properly classified as a project employee; his ten years of rehiring on project-to-project basis did not transform his status into that of a regular employee.

Analysis: Lawfulness of Termination and Remedy

The employer bears the burden of proving that a project employee’s separation was due to project completion. Petitioners claimed respondent’s services terminated due to project completion, but they failed to prove that the particular phase of the World Finance Plaza project to which respondent was assigned had in fact been completed by October 1, 1999 (the date of termination). In the absence of proof of project or phase completion at the time of dismissal, the Supreme Court concluded respondent’s services were terminated without valid cause prior to the expiration of the term for which he was engaged. Under established labor jurisprudence, an unlawful dismissal entails entitlement to reinstatement with full back wages and benefits from dismissal until actual reinstatement.

The Court recognized a conditional limitation: if the project (or the phase to which respondent was assigned) had been completed during the penden

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