G.R. No. 167045 August 29, 2008
COCOMANGAS HOTEL BEACH RESORT and/or SUSAN MUNRO, petitioners, vs. FEDERICO F. VISCA, JOHNNY G. BARREDO, RONALD Q. TIBUS, RICHARD G. VISCA and RAFFIE G. VISCA, respondents.

FACTS

Respondents, performing carpentry and masonry work for the maintenance and repair of petitioners’ resort, were informed on May 8, 1999, to stop reporting for work due to a temporary suspension of construction to avoid guest irritation. They later learned new workers were hired for the same tasks. They filed complaints for illegal dismissal, claiming to be regular employees with continuous service ranging from three to twelve years. Petitioners countered that no employer-employee relationship existed, asserting that respondent Visca was an independent contractor who hired the others for specific projects.
The Labor Arbiter dismissed the complaint, ruling respondents were project employees. The NLRC initially reversed this, finding respondents to be regular employees based on evidence like SSS contributions, commendation letters, and payment of daily wages, overtime, and holiday pay. However, upon petitioners’ motion for reconsideration, the NLRC reversed itself, holding respondents were merely project employees. The Court of Appeals then reinstated the NLRC’s first decision, declaring respondents as regular employees who were illegally dismissed.

ISSUE

Whether an employer-employee relationship existed between the parties, and if so, whether respondents were regular employees or merely project employees.

RULING

The Supreme Court affirmed the CA decision, ruling that respondents were regular employees illegally dismissed. The Court applied the four-fold test for determining employment: the selection and engagement of the employee; payment of wages; power of dismissal; and power of control. Petitioners failed to prove Visca was an independent contractor. Crucially, petitioners exercised control over respondents by directly assigning tasks, providing materials, and supervising their work. Furthermore, the nature of respondents’ work—maintenance and repair—was necessary and desirable to the usual business of operating a resort, satisfying the criteria for regular employment under Article 280 of the Labor Code.
The Court emphasized that the length of service (three to twelve years), the continuous rehiring for tasks integral to the business, and documentary evidence like SSS reports and commendation letters negated the claim of project employment. Project employees are those hired for a specific undertaking with a foreseeable end. Here, the work was recurrent and permanent. Their dismissal, based on a mere suspension notice followed by the hiring of replacements without valid cause or due process, constituted illegal dismissal. Thus, petitioners were liable for reinstatement, full backwages, and other monetary claims.