G.R. No. 192394; July 3, 2013
ROY D. PASOS, Petitioner, vs. PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, Respondent.

FACTS

Petitioner Roy D. Pasos was hired by respondent Philippine National Construction Corporation (PNCC) on April 26, 1996, as a Clerk II (Accounting) for the “NAIA – II Project” under a project employment contract set to end on July 25, 1996. His employment was extended until August 4, 1998. He was subsequently rehired under successive project employment contracts: as an Accounting Clerk (Reliever) for the “PCSO – Q.I. Project” from November 11, 1998, to February 19, 1999; and as an Accounting Clerk for the “SM-Project” from February 23, 1999, which was extended until October 19, 2000. His contracts stated his employment was co-terminus with the specific project.
After his contract ended on October 19, 2000, petitioner was instructed to report for work the next day for possible reemployment. A medical examination revealed he had pneumonitis, and later, Koch’s disease, for which he took a sick leave. Upon presenting a medical clearance on February 16, 2001, he was informed his services had been terminated due to the expiration of his contract on October 19, 2000. On February 18, 2003, petitioner filed a complaint for illegal dismissal, arguing he had attained regular employee status due to his prolonged and repeated rehiring, and that PNCC failed to comply with the reportorial requirement of submitting termination reports to the DOLE upon each project’s completion. PNCC countered that he was a project employee and submitted photocopies of Establishment Termination Reports.
The Labor Arbiter ruled in favor of petitioner, declaring him a regular employee illegally dismissed and awarding back wages and separation pay. The NLRC reversed this decision, dismissing the complaint and ordering only the payment of a completion bonus. The Court of Appeals affirmed the NLRC decision.

ISSUE

Whether or not petitioner Roy D. Pasos was a project employee and not illegally dismissed.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ decision. Petitioner was a project employee, and his dismissal was legal due to the completion of his project.
The Court held that the principal test for determining project employment is whether the employee was assigned to carry out a specific project or undertaking, the duration and scope of which were made known to him at the time of engagement. Petitioner’s successive contracts explicitly stated his employment was for specific projects (NAIA-II, PCSO-Q.I., SM Project) and was co-terminus with each project’s completion. He was aware of the temporary nature of his employment.
The Court found that PNCC substantially complied with the reportorial requirement under Department Order No. 19, Series of 1993, by submitting Establishment Termination Reports to the DOLE upon the completion of the projects where petitioner was assigned. The failure to report a project employee’s termination to the DOLE does not automatically convert him into a regular employee; it merely subjects the employer to possible sanctions for non-compliance.
The Court also noted that the repeated rehiring of petitioner on a project-to-project basis did not confer regular status, as the projects were distinct and separate. His functions, while necessary for each specific project, were not vital, regular, and indispensable to PNCC’s usual business or trade. Therefore, his employment legally ended upon the completion of the SM Project on October 19, 2000. His subsequent medical issues and absence did not alter the fact that his fixed-term contract had already expired.