GR 192650; (October, 2012) (Digest)
G.R. No. 192650; October 24, 2012
FELIX MARTOS, ET AL., Petitioners, vs. NEW SAN JOSE BUILDERS, INC., Respondent.
FACTS
The petitioners were workers hired by respondent New San Jose Builders, Inc. for its San Jose Plains Project, a low-cost housing construction project in Montalban, Rizal. They alleged they were regular employees who were illegally dismissed. The respondent company claimed the petitioners were project employees whose employment was co-terminous with the specific phase of the project to which they were assigned. Due to a lack of funds from the National Housing Authority, the company was constrained to slow down and suspend work, leading to the termination of the petitioners’ employment.
The Labor Arbiter initially dismissed the complaints for lack of merit, ruling the petitioners were project employees. The National Labor Relations Commission (NLRC) reversed this, finding the petitioners to be regular employees and ordering their reinstatement with full backwages. The Court of Appeals, however, reinstated the Labor Arbiter’s decision, dismissing all complaints except that of Felix Martos, who was found to be a regular employee and awarded separation pay in lieu of reinstatement.
ISSUE
The core issue is whether the petitioners were regular employees or project employees of New San Jose Builders, Inc.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The legal logic centered on the distinction between regular and project employment. A project employee is assigned to a specific project with a foreseeable completion date, and their employment ends upon the project’s completion. Regular employees perform tasks necessary and desirable to the employer’s usual business.
The Court found that the respondent company sufficiently proved the petitioners were project employees. It presented project employment contracts and termination reports filed with the Department of Labor and Employment, which indicated the specific projects and phases for which the petitioners were hired and the completion dates thereof. The nature of the construction business, where workers are hired per project, supports this classification. The cessation of work due to the suspension of the project constituted a valid cause for termination of project employment.
However, for Felix Martos, the Court agreed with the CA’s finding that he was a regular employee. His long tenure and assignments across multiple, successive projects for the same company indicated that he was performing tasks necessary and desirable to the company’s usual business, making him a regular employee. His dismissal, absent a valid cause, was illegal. The award of separation pay in lieu of reinstatement was justified under the doctrine of strained relations, as the antagonism from the litigation made reinstatement impracticable.