G.R. No. 218009 . September 21, 2016
MARVIN G. FELIPE AND REYNANTE L. VELASCO, PETITIONERS, VS. DANILO DIVINA TAMAYO KONSTRACT, INC. (DDTKI) AND/OR DANILO DIVINA TAMAYO, PRESIDENT/OWNER, RESPONDENTS.

FACTS

Petitioners Marvin Felipe and Reynante Velasco were hired by respondent construction company DDTKI as Formworks Aide and Warehouse Aide, respectively. They claimed to be regular employees, having worked continuously for several years until September 2010 when they were no longer given work assignments. They inquired about their status and a purported transfer to a new Glorietta Project, referencing a Manpower Requisition Form (MRF), but received no reply. Consequently, they filed a complaint for illegal dismissal and non-payment of monetary benefits.
Respondents contended that petitioners were project employees, hired for specific construction projects under fixed-term contracts that clearly stated the project duration and the fact that employment would end upon the project’s completion. They presented a series of duly signed project employment contracts to support this. DDTKI asserted that petitioners’ last assignment was the US Embassy New Office Annex 1 Project (MNOX-1), which ended in September 2010. Their termination was reported to the DOLE as “completion of phase of work.” The company denied employing them for the Glorietta Project and argued the MRF was an internal administrative document, not an employment contract.

ISSUE

The primary issue was whether petitioners were regular employees illegally dismissed or validly terminated project employees.

RULING

The Supreme Court denied the petition, upholding the rulings of the Labor Arbiter, NLRC, and Court of Appeals that petitioners were project employees validly terminated due to project completion. The legal logic centered on the distinction between regular and project employment under labor law. The Court emphasized that the principal test for 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 the employee at the time of engagement.
Here, the series of project employment contracts, which petitioners signed, definitively established the project-based nature of their work. Each contract specified a particular project and its duration, with a provision stating that the period indicated served as notice of termination upon the project’s end. The completion of the MNOX-1 project constituted a lawful ground for termination under Article 295 (formerly 280) of the Labor Code. The Court rejected the argument that their four years of service and rehiring for successive projects converted them into regular employees. Citing precedent (Aro v. NLRC), it ruled that length of service and rehiring in the construction industry are natural consequences of preferring experienced workers and do not automatically confer regular status where the employment remains coterminous with specific projects. The MRF was correctly deemed an internal memo, not a binding contract for re-employment. As their termination was for an authorized cause, petitioners were not entitled to reinstatement, back wages, or damages. The award of proportionate 13th-month pay by the NLRC was sustained, but claims for service incentive leave were denied for lack of one year of continuous service with a single project.