G.R. No. 156146; June 21, 2007
OLONGAPO MAINTENANCE SERVICES, INC., Petitioner, vs. EDGARDO B. CHANTENGCO, et al., Respondents.

FACTS

Olongapo Maintenance Services, Inc. (OMSI), a janitorial and maintenance service contractor, hired the respondents for various positions such as janitors and grass cutters, assigning them to the Ninoy Aquino International Airport (NAIA) under service contracts with the Manila International Airport Authority (MIAA). On January 14, 1999, OMSI terminated the respondents’ employment. The respondents filed a complaint for illegal dismissal and non-payment of labor standard benefits. OMSI contended that the respondents were project employees whose employment was coterminous with the MIAA service contracts; thus, their termination upon the contracts’ expiration was legal.
The Labor Arbiter dismissed the complaint, except for the award of service incentive leave pay. On appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter, ruling that the respondents were regular employees entitled to separation pay. The NLRC found that the respondents performed tasks necessary and desirable to OMSI’s usual business and were continuously rehired. OMSI’s petition for certiorari to the Court of Appeals was denied, prompting this petition.

ISSUE

Whether the Court of Appeals erred in sustaining the NLRC’s ruling that the respondents were regular employees, not project employees, and were thus illegally dismissed and entitled to separation pay.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic hinges on the application of Article 280 of the Labor Code, which defines regular employment as one where the employee performs activities “usually necessary or desirable in the usual business or trade of the employer,” except where the employment is fixed for a specific project with its termination determined at the time of engagement. The Court found that the respondents, as janitors and maintenance workers, performed tasks integral to OMSI’s janitorial service business, satisfying the “necessary and desirable” criterion for regular employment.
Crucially, OMSI failed to prove the respondents were project employees. It did not establish that the respondents were informed at hiring that their employment was for a specific project with a predetermined completion date. Moreover, OMSI’s failure to submit termination reports to the Department of Labor and Employment, as required for project employees, bolstered the finding of regular employment. In termination cases, the burden of proof lies with the employer to show a just cause for dismissal. OMSI offered only self-serving assertions without corroborative evidence. Consequently, the dismissal was illegal, and the award of separation pay in lieu of reinstatement was proper. The Court of Appeals correctly found no grave abuse of discretion in the NLRC’s decision.