G.R. No. 249092 . September 30, 2020.
ARMANDO N. SERRANO, PETITIONER, VS. LOXON PHILIPPINES, INC., RESPONDENT.

FACTS

Petitioner Armando N. Serrano was hired by respondent Loxon Philippines, Inc., a building management company, in 1994 as a Helper Service Technician. For over 21 years, he was repeatedly re-hired for successive, specific projects involving the installation and maintenance of fire alarm systems and smoke detectors. Each engagement was covered by a project employment contract specifying the project name and duration. His last contract was for the Ayala Center Project from January 3 to December 31, 2015. In December 2015, Loxon informed Serrano that his contract was expiring and offered him a new three-month contract, requiring him to submit an NBI Clearance and Medical Certificate. Serrano refused, believing himself to be a regular employee. He submitted the documents in January 2016 but was not given a new assignment. He then filed a complaint for illegal dismissal.
The Labor Arbiter dismissed the complaint, finding Serrano belonged to a regular work pool but that his contract had merely expired. The National Labor Relations Commission (NLRC) and the Court of Appeals (CA) affirmed, categorizing Serrano as a project employee. They held his employment legally ended upon the completion of the specific project for which he was hired, as stipulated in his contract, and that Loxon complied with reporting requirements.

ISSUE

Whether the CA erred in ruling that Serrano was a project employee and not illegally dismissed.

RULING

The Supreme Court denied the petition and affirmed the CA ruling. The legal logic hinges on the distinction between regular and project employment under Article 295 of the Labor Code. An employee is deemed regular if engaged in activities usually necessary or desirable in the employer’s business. The exception is project employment, where the employee is hired for a specific project with a determined completion date. The Court found Serrano falls under this exception. The successive project employment contracts, which he signed, definitively established the specific undertakings and their durations. His repeated re-hiring over two decades does not automatically convert his status to regular, as length of service is not the controlling factor for project employees. The nature of the construction industry, to which Loxon’s business is related, often involves discontinuous projects. Furthermore, Loxon validly exercised management prerogative in requiring updated clearances as a condition for a new contract. Since his employment was coterminous with the project, there was no dismissal to speak of upon the project’s completion. His refusal to sign a new contract for a subsequent project was a refusal of a fresh offer of employment, not a termination of an existing one. Thus, no illegal dismissal occurred.