Distinction between a regular and a project employment

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code:

            ART. 280. Regular and Casual Employment.— The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

            An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.[7]

          The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been “engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer”; (b)  project employees or those “whose employment has been fixed for a specific project or undertaking[,] the completion or termination of which has been determined at the time of the engagement of the employee”; (c)   seasonal employees or those who work or perform services which are seasonal in nature, and the employment is for the duration of the season;[8] and (d) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence has added a fifth kind— a fixed-term employee.[9]

Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of any contract expressing otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein is to bring to life the policy enshrined in the Constitution to “afford full protection to labor.”[10] Thus, labor contracts are placed on a higher plane than ordinary contracts; these are imbued with public interest and therefore subject to the police power of the State.[11]

However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific project or undertaking remain valid under the law:

x x x By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may not expect to be employed continuously beyond the completion of the project. It is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a contract of employment. Project employment contracts are not lopsided agreements in favor of only one party thereto. The employer’s interest is equally important as that of the employee[s’] for theirs is the interest that propels economic activity. While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration, such contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a prejudicial employment contract. After all, under the law, the interest of the worker is paramount.[12]

In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts indicating the specific project or phase of work for which they were hired, with a fixed period of employment. The NLRC correctly disposed of this issue:

            A deeper examination also shows that [the individual members of petitionerUnion] indeed signed and accepted the [employment contracts] freely and voluntarily. No evidence was presented by [petitioner]Unionto prove improper pressure or undue influence when they entered, perfected and consummated [the employment] contracts. In fact, it was clearly established in the course of the trial of this case, as explained by no less than the President of [petitioner]Union, that the contracts of employment were read, comprehended, and voluntarily accepted by them. x x x.

            x x x x

            As clearly shown by [petitioner] Union’s own admission, both parties had executed the contracts freely and voluntarily without force, duress or acts tending to vitiate the worker[s’] consent. Thus, we see no reason not to honor and give effect to the terms and conditions stipulated therein. x x x.[13]

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence.

          It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence.[14] Rule 133, Section 5 defines substantial evidence as “that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.”

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases.[15] We may take cognizance of and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent with those of the CA.[16]

          In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Unionwere project employees. Nonetheless, petitioner Unioninsists that they were regular employees since they performed work which was usually necessary or desirable to the usual business or trade of the Construction Department of respondent.

          The landmark case of ALU-TUCP v. NLRC[17] instructs on the two (2) categories of project employees:

            It is evidently important to become clear about the meaning and scope of the term “project” in the present context. The “project” for the carrying out of which “project employees” are hired would ordinarily have some relationship to the usual business of the employer. Exceptionally, the “project” undertaking might not have an ordinary or normal relationship to the usual business of the employer. In this latter case, the determination of the scope and parameters of the “project” becomes fairly easy. x x x.   From the viewpoint, however, of the legal characterization problem here presented to the Court, there should be no difficulty in designating the employees who are retained or hired for the purpose of undertaking fish culture or the production of vegetables as “project employees,” as distinguished from ordinary or “regular employees,” so long as the duration and scope of the project were determined or specified at the time of engagement of the “project employees.” For, as is evident from the provisions of Article 280 of the Labor Code, quoted earlier, the principal test for determining whether particular employees are properly characterized as “project employees” as distinguished from “regular employees,” is whether or not the “project employees” were assigned to carry out a “specific project or undertaking,” the duration (and scope) of which were specified at the time the employees were engaged for that project.

In the realm of business and industry, we note that “project” could refer to one or the other of at least two (2) distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. The typical example of this first type of project is a particular construction job or project of a construction company. A construction company ordinarily carries out two or more [distinct] identifiable construction projects: e.g., a twenty-five-storey hotel inMakati; a residential condominium building inBaguioCity; and a domestic air terminal inIloiloCity. Employees who are hired for the carrying out of one of these separate projects, the scope and duration of which has been determined and made known to the employees at the time of employment, are properly treated as “project employees,” and their services may be lawfully terminated at completion of the project.

The term “project” could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times.[18]

Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific undertaking which completion or termination has been determined at the time of the particular employee’s engagement.

          In this case, as previously adverted to, the officers and the members of petitioner Union were specifically hired as project employees for respondent’s Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently, upon the completion of the project or substantial phase thereof, the officers and the members of petitionerUnioncould be validly terminated.

          PetitionerUnionis adamant, however, that the lack of interval in the employment contracts of its officer and members negates the latter’s status

as mere project employees. For petitionerUnion, the lack of interval further drives home its point that its officers and members are regular employees who performed work which was usually necessary or desirable to the usual business or trade of respondent.

          We are not persuaded.

Petitioner Union’s members’ employment for more than a year does equate to their regular employment with respondent. In this regard, Mercado, Sr. v. NLRC[19] illuminates:

            The first paragraph [of Article 280 of the Labor Code] answers the question of who are regular employees. It states that, regardless of any written or oral agreement to the contrary, an employee is deemed regular where he is engaged in necessary or desirable activities in the usual business or trade of the employer, except for project employees.

            A project employee has been defined to be one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season, as in the present case.

            The second paragraph of Art. 280 demarcates as “casual” employees, all other employees who do not fall under the definition of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees those “casual” employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken.

            Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case and that the Labor Arbiter should have considered them regular by virtue of said proviso. The contention is without merit.

            The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or restrain or limit the generality of the clause that it immediately follows. Thus, it has been held that a proviso is to be construed with reference to the immediately preceding part of the provision to which it is attached, and not to the statute itself or to other sections thereof. The only exception to this rule is where the clear legislative intent is to restrain or qualify not only the phrase immediately preceding it (the proviso) but also earlier provisions of the statute or even the statute itself as a whole.

            Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual employees was designed to put an end to casual employment in regular jobs, which has been abused by many employers to prevent so – called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. The same instructions show that the proviso in the second paragraph of Art. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers against their employees and not, as petitioners would have us believe, to prevent small-scale businesses from engaging in legitimate methods to realize profit. Hence, the proviso is applicable only to the employees who are deemed “casuals” but not to the “project” employees nor the regular employees treated in paragraph one of Art. 280.

            Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment legally ends upon completion of the project or the [end of the] season. The termination of their employment cannot and should not constitute an illegal dismissal.

Considering our holding that the officers and the members of petitionerUnionwere project employees, its claim of union busting is likewise dismissed.

http://sc.judiciary.gov.ph/jurisprudence/2011/march2011/170351.htm

About Erineus

Born on December 28, 1965, Surallah, South Cotabato, Southern Mindanao, Philippines.
This entry was posted in Labor Law, Labor Union and tagged . Bookmark the permalink.

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