Inconsistent position

Is length of service a controlling factor in determining the nature of one’s employment? In other words, will project employees become regular employees simply because they have been working for a number of years with a company? What is the principal test in determining whether employees are regular or project employees? These are the questions settled in the case of ACD, a construction company.

ACD hired Bert, Bernie, Manny, Rey, Alex, Ed, and Gary on different dates from 1976 to 1992. They were part of a work pool from where ACD drew them either as laborers, road roller operator, painter or drivers on various construction projects. They were hired and re-hired over a period of 18 years. But thereafter, their services were no longer renewed.

So, in 1997, Bert and his group filed complaints for illegal dismissal, non-payment of 13th month pay, service incentive leave pay, premium pay for holidays and rest days, as well as moral and exemplary damages, against ACD and its General Manager Oscar before the Labor Arbiter (LA) of the NLRC.

ACD and Oscar denied liability. They alleged that Bert and his group were project employees since their services were necessary only when the company had projects to be completed. They argued that being project employees, Bert and company’s employment was conterminous with the project to which they were assigned; that they were not regular employees who enjoyed security of tenure and who are entitled to separation pay upon termination from work.

But the LA declared Bert, Bernie, Manny, Rey, Alex, Ed and Gary as regular employees because they belonged to a "work pool" from which the company drew workers for assignment to different projects at its discretion and that they were assigned and re-assigned for over 18 years. The LA likewise found that their employment was terminated without just cause, so he ordered their reinstatement with back-wages until actually reinstated, payment of salary differentials, 13th month pay, and service incentive leave pay. This decision was affirmed in its entirety by the NLRC.

On appeal to the Court of Appeals (CA), ACD and Oscar changed their tune and argued that they were not liable for illegal dismissal since the services of Bert and his group was merely put on hold until the resumption of their business operations. The CA dismissed the appeal and upheld the rulings of the LA and the NLRC. The CA said that ACD and Oscar are already barred from raising a new defense at this stage. Were the rulings of the LA, NLRC and CA that Bert and company were regular employees correct?

Yes. But the reasons they cited for so declaring them as regular employees are not correct. Employees like Bert et. al. who work under different project employment contracts for several years do not automatically become regular employees; they can remain as project employees regardless of the number of years they work. Length of service is not a controlling factor in determining the nature of one’s employment.

Moreover, employees who are members of work pool from which a company like ACD draws workers for deployment in different projects do not become regular employees by reason of that fact alone. Members of a work pool can either be project or regular employees.

The principal test of determining whether employees are "project" or "regular" employees is whether they are assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time they are engaged for that project. Such duration, as well as the particular work/service performed, are defined in an employment agreement and made clear to the employees at the time of hiring.

In this case, ACD and Oscar did not have that kind of agreement with Bert and his group. Neither did ACD and Oscar inform them of the nature of their work at the time of hiring. Hence for failure of ACD and Oscar to substantiate their claim that Bert and his group are project employees, the latter are regular employees.

Furthermore, ACD and Oscar’s inconsistent and conflicting positions in the LA and NLRC from that in the CA on their true employment relations with Bert and company make it all the more evident that that latter were indeed regular employees (Abesco and Banzon vs. Ramirez et. al. G.R. 141168, April 10, 2006).

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