G.R. Nos. 104444-49. December 27, 1994.
PHESCO, INC. and CARLOS GANZON, petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION, NICANOR DURO, MANUEL JABLA, AURELIO ERMAC, RODOLFO RAMIREZ, WELITO SABADUQUIA and FERNANDO DORIO, respondents.

FACTS

Petitioner Phesco, Inc., a construction firm, hired private respondents between 1975 and 1977 for its Agus I hydroelectric project in Marawi City. Due to a strike in June 1986, they were reassigned to Phesco’s aggregate processing plant in Iligan City. When the strike was resolved in August 1988, Phesco terminated their services, contending they were project employees whose work ended with the Agus I project’s completion. The private respondents filed a complaint for illegal dismissal.
The Labor Arbiter dismissed the illegal dismissal claim but awarded separation pay, finding the cessation of the plant’s business justified termination. The NLRC reversed this decision on appeal, ruling the dismissals were illegal. It found the employees were regular, not project, employees, and ordered their reinstatement with full back wages and separation pay if reinstatement was not feasible, plus attorney’s fees.

ISSUE

Whether the NLRC committed grave abuse of discretion in ruling that the private respondents were regular employees illegally dismissed, and thus entitled to reinstatement, back wages, and separation pay.

RULING

The Supreme Court upheld the NLRC’s decision, finding no grave abuse of discretion. The legal logic centered on the classification of the employees. The Court emphasized that an employee’s status is determined by the nature of their activities and the employer’s business. Petitioners failed to prove the employees were project-based. Crucially, the NLRC found the aggregate plant sold materials to the general public, not just the specific Agus I project, making its operations regular and necessary to Phesco’s construction business. The employees’ continuous work from 1986 to 1988, long after the Agus I project’s purported completion, further removed them from project employee status, aligning with precedent that such extended employment indicates regularity.
Furthermore, petitioners did not comply with Department of Labor Policy Instruction No. 20, which requires employers to report the termination of project employees to the public employment office upon a project’s completion. This procedural failure bolstered the finding of regular employment. Regarding claims that some employees abandoned their jobs, the Court sustained the NLRC’s finding that petitioners presented no proof these employees received return-to-work notices. Thus, the NLRC’s factual determinations and application of labor law were sound, warranting dismissal of the certiorari petition.