Case Summary (G.R. No. 200401)
Petitioner’s Position
The petitioner contended that Trinidad was a project employee whose employment was co-terminous with specific construction projects. Petitioner maintained that it lawfully engaged Trinidad repeatedly under written “Appointment as Project Worker” contracts, that gaps between engagements were inherent to the construction industry, and that it complied with labor rules by submitting the establishment termination report to DOLE for the project whose completion ended Trinidad’s last engagement.
Respondent’s Claim
Trinidad alleged continuous service spanning sixteen years beginning in 1988 through repeated employment on multiple projects and claimed illegal dismissal and unpaid benefits after his employment ended when the Boni Serrano–Katipunan Interchange Project finished in December 2004. He asserted that the company later opened a project in Batangas but did not rehire him, and he invoked entitlement to regular-employee status and attendant protections.
Key Dates and Procedural History
- Complaint for illegal dismissal and unpaid benefits filed: August 1, 2006 (Labor Arbiter).
- Labor Arbiter decision: December 23, 2006 — complaint for unjust dismissal dismissed; award of P1,500 for unpaid service incentive leave based on three-year prescription for money claims.
- NLRC: Affirmed Labor Arbiter decision, August 31, 2007.
- Court of Appeals (CA): Reversed NLRC, April 24, 2008 (CA-G.R. SP 101903). CA denied reconsideration.
- Supreme Court: Petition for review; final disposition set aside CA decision and reinstated NLRC decision (G.R. No. 183250).
Applicable Law and Authorities
Constitutional basis: 1987 Philippine Constitution (applicable because decision date is 2010). Statutory and regulatory framework: labor laws governing employee status and benefits, DOLE Order No. 19 (requiring employer report of termination upon project completion), and Social Security System (SSS) as a social safety mechanism. Judicial authorities cited by the courts include ALU-TUCP v. NLRC (G.R. No. 109902, Aug. 2, 1994), Alcatel Philippines, Inc. v. Relos (G.R. No. 164315, July 3, 2009), and Caseres v. Universal Robina Sugar Milling Corporation (G.R. No. 159343, Sept. 28, 2007).
Issue Presented
Whether the Court of Appeals correctly ruled that Trinidad’s repeated rehiring over the course of sixteen years and numerous projects converted his status from project employee to regular employee, thereby entitling him to the security and benefits of regularization.
Material Facts
Trinidad worked for petitioner in various capacities as driver from 1988 until December 2004, repeatedly signing project-specific employment contracts for successive projects. The engagements were co-terminous with individual projects and separated by intervals. After completion of the Boni Serrano–Katipunan Interchange Project in December 2004, Trinidad’s contract ended; petitioner later opened another project in Batangas but did not rehire Trinidad for that project. Petitioner submitted a termination report to DOLE for the last project; documentary proof of earlier termination reports was not presented at the Labor Arbiter hearing.
Labor Arbiter and NLRC Findings
The Labor Arbiter concluded that Trinidad was a project employee and that his loss of work upon project completion did not constitute unjust dismissal. The Arbiter awarded P1,500 for unpaid service incentive leave, applying the three-year prescriptive period for money claims and found no basis for overtime, holiday pay, or 13th month pay. The NLRC affirmed the Labor Arbiter’s decision.
Court of Appeals’ Rationale
The CA reversed, finding that Trinidad’s repeated rehiring across approximately thirty-five projects over sixteen years established regular employment. The CA characterized Trinidad’s functions (driver of essential company vehicles) as vital, necessary, and indispensable to petitioner’s business and held that predictable interruptions between projects were insufficient to defeat regularization. While recognizing that the test for project versus regular status is whether an employee was engaged for a specific project with duration and scope determined at the time of engagement, the CA concluded that the practical reality of continuous reliance on Trinidad’s services converted his tenure into a regular status.
Supreme Court Ruling
The Supreme Court granted the petition for review, set aside the CA decision, and reinstated the NLRC decision affirming the Labor Arbiter. The Court held that Trinidad remained a project employee because each of his employments was expressly contracted to be co-terminous with specific projects whose duration and completion were known at the time of engagement.
Reasoning and Legal Principles Applied
The Court reaffirmed the governing test distinguishing project employees from regular employees: the decisive criterion is whether the employment was fixed for a specific project or undertaking with its duration and scope determined at the time of engagement. While length of service may ordinarily be a fair indicator of regularization in other industries, the Court recognized that such a standard is not appropriate for the construction industry where work is inherently project-based and intermittent, and where contractors cannot guarantee continuity of projects or payrolls beyond a project’s life. The Court relied on Caseres v. Universal Robina Sugar Milling Corporation to hold that repeated successive rehiring in construction does not automatically confer regular status; instead, the contractual co-terminous nature of each engagement controls. The Court
...continue readingCase Syllabus (G.R. No. 200401)
Facts and Background
- On August 1, 2006, Jorge R. Trinidad filed a complaint for illegal dismissal and unpaid benefits against William Uy Construction Corporation.
- Trinidad alleged he worked for the company for 16 years since 1988 as a driver of its service vehicle, dump truck, and transit mixer.
- He executed several employment contracts identifying him as a "project employee" and was assigned to work on successive company projects, with intervals between engagements.
- Trinidad alleged that in December 2004 the company terminated him after it shut down operations for lack of projects, and that when the company later opened a project in Batangas it did not rehire him.
- The petitioner company explained it is in the construction business, necessarily engages project construction workers whose employment is co-terminous with specific projects, and that employment intervals or gaps are inherent to the construction industry.
- Petitioner asserted that after the completion of its Boni Serrano–Katipunan Interchange Project in December 2004 Trinidad’s work ended with the project.
- The company said it submitted an establishment termination report to the Department of Labor and Employment (DOLE) in compliance with labor rules.
Procedural History
- The Labor Arbiter rendered a decision on December 23, 2006 dismissing Trinidad’s complaint for unjust dismissal but ordering payment of P1,500.00 for unpaid service incentive leave, considering the three-year prescriptive period for money claims.
- The Labor Arbiter found Trinidad to be a project employee and accepted the company’s compliance with DOLE reporting, thus ruling the loss of work was not unjust dismissal and denying overtime, holiday pay, and 13th month pay claims.
- On August 31, 2007, the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision.
- Trinidad elevated the case to the Court of Appeals (docketed CA-G.R. SP 101903); on April 24, 2008 the Court of Appeals reversed the NLRC.
- Petitioner company moved for reconsideration before the CA, which denied the motion.
- The petition for review was brought to the Supreme Court, which issued the decision reported at 629 Phil. 185 (Second Division) on March 10, 2010.
Issue Presented
- Whether the Court of Appeals correctly held that Trinidad’s repeated rehiring over 16 years and in numerous projects transformed his status from project employee to regular employee.
Labor Arbiter’s Findings and Rationale
- The Labor Arbiter held Trinidad was a project employee whose employment was co-terminous with specific projects.
- Because the company submitted an establishment termination report to DOLE, the termination of Trinidad’s work at the end of the project was not an unjust dismissal.
- The Labor Arbiter found no basis for overtime pay, holiday pay, and 13th month pay.
- The Labor Arbiter nevertheless awarded P1,500.00 for unpaid service incentive leave, applying the three-year prescriptive period for monetary claims.
NLRC Ruling
- The National Labor Relations Commission affirmed the Labor Arbiter’s decision, thereby upholding the dismissal of the illegal dismissal complaint and the limited money award.
Court of Appeals Decision and Reasoning
- The Court of Appeals reversed the NLRC and Labor Arbiter, holding that Trinidad had acquired the status of a regular employee despite starting as a project employee.
- The CA’s reasoning emphasized the long, continuous pattern: Trinidad was repeatedly rehired in the company’s past 35 projects over 16 years.
- The CA characterized Trinidad’s work as driver of essential company vehicles (service vehicle, dump truck, transit mixer) as vital, necessary, and indispensable to the company’s construction business.
- The CA treated the intervals between employment contracts as inconsequential, considering stoppage between projects a foreseeable interruption of work; thus, repeated successive rehiring led to regular