G.R. No. 201247 , July 13, 2020
Engineering & Construction Corporation of Asia [Now First Balfour, Incorporated], Petitioner, vs. Segundino Palle, Felix Velosa, Alberto Pampanga, Randy Galabo, Marco Galapin and Gerardo Felicitas, Respondents.

FACTS

Petitioner Engineering & Construction Corporation of Asia (ECCA), now First Balfour Incorporated, is a domestic construction corporation. Respondents were hired by ECCA on various dates between 1975 and 1998 as carpenters, plumbers/pipefitters, and steelmen. In 2004, respondents filed an illegal dismissal complaint against ECCA before the National Labor Relations Commission (NLRC). ECCA claimed respondents were project employees validly terminated upon project completion. Respondents argued they were regular employees, performing tasks necessary and desirable to ECCA’s construction business over many years, and were not given benefits accorded to regulars. The Labor Arbiter ruled in favor of respondents, declaring them regular employees illegally dismissed and ordering reinstatement with backwages. The NLRC reversed, holding respondents were project employees. The Court of Appeals reinstated the Labor Arbiter’s decision, finding respondents were regular employees illegally terminated.

ISSUE

Whether respondents were regular employees illegally dismissed or project employees validly terminated upon project completion.

RULING

The Supreme Court denied ECCA’s petition and affirmed the Court of Appeals with modification. Respondents were regular employees illegally dismissed. The Court distinguished regular from project employees under Article 295 (280) of the Labor Code. For project employment, the employer must prove: (1) the employee was assigned to carry out a specific project or undertaking; and (2) the duration and scope of the project were specified at the time of engagement. ECCA failed to present written employment contracts specifying the duration and scope of respondents’ work for each project. While repeated rehiring does not automatically confer regular status, the absence of such written contracts is evidence that respondents were not properly informed of their status as project employees. Furthermore, ECCA failed to submit termination reports to the DOLE upon completion of each project, as required by Department Order No. 19 for project employees in the construction industry. Respondents performed tasks necessary and desirable in ECCA’s construction business for substantial periods, with the longest being 26 years. Thus, they attained regular status. Their dismissal without just or authorized cause constituted illegal dismissal. The Court imposed legal interest of six percent per annum on all monetary awards from finality of decision until full payment.