G.R. No. 255602 , August 4, 2021
JOY M. VILLARICO, PETITIONER, VS. D.M. CONSUNJI, INC., AND MADELINE B. GACUTAN, RESPONDENTS.

FACTS

Petitioner Joy M. Villarico was first employed by respondent D.M. Consunji, Inc. (DMCI) as a laborer on November 8, 2007, and was subsequently assigned to various projects. His last assignment was as a crane operator for the NAIA Expressway Project starting March 2016. On March 30, 2016, he was informed of a four-day suspension for a company policy violation. Upon his return, he refused to sign a document presented by the site administrator and was then told he was absent without leave and that his termination papers would be sent via courier. Villarico sought NLRC assistance, and during mediation, DMCI placed him on floating status for two months. He was then required to undergo a medical examination, where he tested positive for prohibited drugs (tetrahydrocannabinol) in both initial and confirmatory tests. After follow-ups yielded no results, he filed a complaint for illegal dismissal, non-payment of service incentive leave pay, 13th month pay, separation pay, and damages on August 30, 2016.
Respondents contended that Villarico was a project employee hired under a fixed-term contract from September 16, 2015, to April 22, 2016, which expired upon the project’s completion, as evidenced by a Notice of Termination and a report filed with the DOLE. They asserted that his application for rehire as a crane operator in June 2016 was denied because he tested positive for drugs during the pre-employment medical exam, which is a dismissible offense under company policy. They also presented bank debit advisories as proof of payment for his service incentive leave and 13th month pay.
The Labor Arbiter dismissed the complaint, ruling Villarico was a project employee whose contract expired, and his failure in the drug test justified DMCI’s refusal to rehire him. The NLRC and the Court of Appeals affirmed these rulings. Villarico appealed to the Supreme Court, arguing he was a regular employee due to nine years of continuous rehiring, that he was illegally dismissed without due process, and that he was entitled to various monetary claims.

ISSUE

Whether the Court of Appeals erred in affirming the dismissal of Villarico’s complaint, specifically on the grounds of his employment status (project vs. regular employee), the legality of his dismissal, and his entitlement to monetary claims.

RULING

The Supreme Court found the petition partly meritorious. It held that Villarico was a regular employee, not a project employee. The Court examined his employment history, which showed he was repeatedly and successively rehired by DMCI from 2007 to 2016 for various positions (laborer, rigger, crane operator) essential to DMCI’s construction business. The contracts presented, while labeled as project employment, did not definitively prove the specific projects or their durations. Citing D.M. Consunji Corporation v. Bello, the Court ruled that the repeated rehiring under contracts of short duration, with roles necessary and desirable to the employer’s trade, conferred regular status. The submission of termination reports to the DOLE alone does not establish project employment if the nature of work is usually necessary in the business.
However, the Court ruled that Villarico was not illegally dismissed. His fixed-term contract expired on April 22, 2016, which constituted a legal dismissal. DMCI’s subsequent refusal to rehire him after he tested positive for drugs in a pre-employment exam was a valid exercise of management prerogative, especially given the safety-sensitive nature of his crane operator position and the company’s drug-free policy. The Court noted that the drug test was conducted after his contract had already expired, in relation to a new application, and thus was not the cause of a dismissal but a ground for non-rehire.
Consequently, Villarico was not entitled to reinstatement, backwages, or separation pay. His claims for service incentive leave pay and 13th month pay were denied as respondents sufficiently proved payment via bank debit advisories, which Villarico failed to rebut. His claims for overtime pay, night shift differential, and salary differential were also denied for lack of substantiation. Finally, his claims for moral and exemplary damages and attorney’s fees were denied due to the absence of illegal dismissal or bad faith. The Court modified the CA decision by declaring Villarico a regular employee but upheld the dismissal of his monetary claims.