G.R. No. 157680; October 8, 2008
EQUIPMENT TECHNICAL SERVICES or JOSEPH JAMES DEQUITO, petitioners, vs. COURT OF APPEALS, ALEX ALBINO, REY ALBINO, JULIUS ABANES, MIGUEL ALINAB, CHRISTOPHER BIOL, NELSON CATONG, RENATO DULOT, FLORO PACUNDO, MARCELITO GAMAS, REYNALDO LIMA, SAMMY MESAGAL, ERNESTO PADILLA, and CONRADO SULIBAGA, respondents.

FACTS

Petitioner Equipment Technical Services (ETS), engaged in subcontracting plumbing works, hired private respondents as pipe fitters, plumbers, or threaders for various projects, including one for Uniwide Sales, Inc. In December 1998, ETS experienced financial difficulties when Uniwide failed to pay, resulting in ETS only paying a partial 13th month pay. Private respondents filed cases before the NLRC for money claims (NLRC NCR Case No. 00-01-00571-99). Later, two other cases for illegal dismissal and money claims were filed (NLRC NCR Case Nos. 00-02-01429-99 and 00-02-01615-99) when the complainants were refused work on another ETS project (Richville project) allegedly for refusing to sign individual employment contracts. The three cases were consolidated. The Labor Arbiter ruled that private respondents were regular employees, illegally dismissed, and awarded backwages, monetary claims, and attorney’s fees. The NLRC reversed the finding of regular employment and illegal dismissal but upheld the monetary award and ordered petitioners to give complainants priority in hiring. The Court of Appeals, in its Amended Decision, reinstated the Labor Arbiter’s decision, finding private respondents to be regular employees and their dismissal illegal.

ISSUE

Whether private respondents are project employees or regular employees of ETS.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ Amended Decision. Private respondents are regular employees, not project employees. The principal test for distinguishing a project employee is whether the employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time of engagement. ETS failed to prove that private respondents were project employees. It did not present any written contract of employment specifying the duration or scope of a particular project. The activities performed by private respondents (plumbing, pipe fitting) were necessary and desirable in ETS’s usual business of subcontracting plumbing works. Furthermore, ETS failed to comply with Department Order No. 19 (requiring report of termination of project employees to the DOLE), which is indicative of project employment. Their dismissal for refusing to sign employment contracts after they filed a case against ETS constituted illegal dismissal. Petitioners were ordered to reinstate private respondents with full backwages and pay proportionate 13th month pay, holiday pay, service incentive leave pay, and attorney’s fees.