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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
In the present case, the Supreme Court laid down these five guiding principles to determine the nature of employment of workers in the construction industry:
First, a worker is presumed a regular employee, unless the employer establishes that (1) the employee was hired under a contract specifying that the employment will last only for a specific undertaking, the termination of which is determined at the time of engagement; (2) there was indeed a project undertaken; and (3) the parties bargained on equal terms, with no vices of consent.
Second, if considered a regular employee at the outset, security of tenure already attaches, and the subsequent execution of project employment contracts cannot undermine such security, but will simply be considered a continuation in the regular engagement of such employee.
Third, even if initially engaged as a project employee, such nature of employment may ripen into regular status if (1) there is a continuous rehiring of project employees even after cessation of a project; and (2) the tasks performed by the alleged “project employee” are vital, necessary and indispensable to the usual business or trade of the employer. Conversely, project-based employment will not ripen into regularity if the construction worker was truly engaged as a project-based employee, and between each successive project, the employer made no manifestations of any intent to treat the worker as a continuing resource for the main business.
Fourth, regularized construction workers are subject to the “no work, no pay” principle, such that the employer is not obligated to pay them a salary when “on leave.” In case of an oversupply of regularized construction workers, then the employer can exercise management prerogative to decide whom to engage for the limited projects and whom to consider as still “on leave.”
Fifth, submission of termination reports to the DOLE Field Office “may be considered” only as an indicator of project employment; conversely, non-submission does not automatically grant regular status. By themselves, such circumstances do not determine the nature of employment.
Facts:
Carpio worked as an electrician for Modair.
A Certificate of Employment dated May 23, 2013 issued by Modair’s Deputy General Manager indicates that Carpio has been employed as a “contractor’s employee (per project basis),” designated as “Electrician 3,” from October 27, 1998 to April 10, 2013. Apart from the Certificate of Employment, the evidence provides no further information regarding Carpio’s employment between 1998 to 2008, only providing details from 2008 onwards.
In a Memorandum dated August 1, 2008, Modair informed Carpio that the “IBIDEN BACK END EXPANSION Project will soon cease operation due to its project completion[,]” (Back End Expansion Project) for which Carpio’s “services will be terminated effective August 15, 2008” and that he will be “notified accordingly for re-contract if [his] services will again be needed.” Identical language is found in a Memorandum dated November 30, 2009, terminating his services for the “PIL GREEN CONSTRUCTION Project” (PIL Green Project) effective December 15, 2009; and a Memorandum dated September 25, 2010, terminating his services for the “FAC D. UTIL. WORKS Project” (UTIL. Works Project) effective October 9, 2010.
Apart from the foregoing, Modair also engaged Carpio for the “IBIDEN CPU S3 Project” (Ibiden CPU Project), for which Modair issued a Memorandum dated July 25, 2012, terminating his services effective August 10, 2012. Modair submitted an Establishment Employment Report to the Department of Labor and Employment (DOLE) Makati City Field Office, informing said office of the completion of the Ibiden CPU Project. Accordingly, Carpio executed an Affidavit of Release and Quitclaim dated August 25, 2012, acknowledging that his project employment ceased upon termination of the project, stating that he had no claims against Modair, and that said affidavit was explained to him by a Modair official.
Modair again hired Carpio for the “NYK TECH PARK project” (NYK Project), with his engagement covered by a Project Agreement dated August 8, 2012 (NYK Project Agreement), notably indicating that: Carpio would be hired “as the ELECTRICIAN 3 for the duration of the project undertaken by the company x x x effective August 26, 2012 with scheduled date of completion on March 25, 2013 or upon the completion of the phase of the work [for] which he is assigned”; that Carpio “shall work for the duration of the project unless he/she is terminated”; that the contract “is deemed terminated upon the completion of the project,” among other eventualities; and that “[t]wo weeks prior to project completion, [Carpio] will receive a notice of project completion x x x to remind [Carpio] that the phase of the said project where [he is] assigned will soon be finished and therefore [his] services with the company will also be cessated.”
Modair issued a Memorandum dated March 25, 2013, with language similar to those above-enumerated, informing Carpio of the termination of his services effective April 10, 2013. Modair also submitted an Establishment Employment Report to the DOLE Makati City Field Office, informing such office of the completion of the NYK Project. Subsequently, Carpio signed his Final Release of Pay dated April 25, 2013, which incorporated a Quit Claim whereby he waived any claims against Modair and confirmed the full payment of everything due him from the NYK Project. He also executed an Affidavit of Release and Quitclaim dated May 24, 2013, similar to that for the Ibiden CPU Project.
Issues:
(1) Whether Carpio is a project-based or regular employee of Modair; and
(2) Whether Carpio was illegally dismissed.
Ruling:
(1) Carpio is a regular employee of Modair.
The Supreme Court laid down these five guiding principles to help obviate further confusion regarding the nature of employment for workers in the construction industry:
First, a worker is presumed a regular employee, unless the employer establishes that (1) the employee was hired under a contract specifying that the employment will last only for a specific undertaking, the termination of which is determined at the time of engagement; (2) there was indeed a project undertaken; and (3) the parties bargained on equal terms, with no vices of consent.
Second, if considered a regular employee at the outset, security of tenure already attaches, and the subsequent execution of project employment contracts cannot undermine such security, but will simply be considered a continuation in the regular engagement of such employee.
Third, even if initially engaged as a project employee, such nature of employment may ripen into regular status if (1) there is a continuous rehiring of project employees even after cessation of a project; and (2) the tasks performed by the alleged “project employee” are vital, necessary and indispensable to the usual business or trade of the employer. Conversely, project-based employment will not ripen into regularity if the construction worker was truly engaged as a project-based employee, and between each successive project, the employer made no manifestations of any intent to treat the worker as a continuing resource for the main business.
Fourth, regularized construction workers are subject to the “no work, no pay” principle, such that the employer is not obligated to pay them a salary when “on leave.” In case of an oversupply of regularized construction workers, then the employer can exercise management prerogative to decide whom to engage for the limited projects and whom to consider as still “on leave.”
Fifth, submission of termination reports to the DOLE Field Office “may be considered” only as an indicator of project employment; conversely, non-submission does not automatically grant regular status. By themselves, such circumstances do not determine the nature of employment.
Applying the principles just laid down, the Court finds that Carpio was a regular employee of Modair, from the time of his engagement in 1998 until the completion of the NYK Project in 2013.
While conclusive details on the nature of Carpio’s engagement from 1998 to 2008 are unavailable, the existence of an employer-employee relationship during such period stood unrebutted. The Certificate of Employment indicated that Carpio served as Modair’s Electrician 3 since 1998, which Modair did not deny. Also, Carpio presented regular payslips from 2001 to 2010. Since Modair failed to present evidence showing his purported project employment during such time, he is presumed to be Modair’s regular employee.
The Memoranda between 2008 and 2013, providing notices of completion of the Back End Extension Project, PIL Green Project, UTIL. Works Project, Ibiden CPU Project and NYK Project, do not establish that Carpio was hired under a contract specifying that his employment would last only for such specific undertakings, the completion of which were determined at the time of his engagement These Memoranda were mere notices issued in anticipation of the completion of the pertinent projects, and did not embody the agreements, if any, covering Carpio’s purported project-based engagements.
Even while the Certificate of Employment designates Carpio as a “contractor’s employee (per project basis),” Bello instructs that the employer’s categorization of the worker’s employment status is not decisive.
True, Modair managed to present project employment contracts covering the tail-end of Carpio’s engagement. Still, the Court finds that, by this time, Carpio’s successive service as Electrician 3 in numerous construction projects manifested the vitality and indispensability of his work to the construction business of Modair. Very revealing also are the terms of Modair’s Memoranda, which state that Carpio will be “notified accordingly for re-contract if [his] services will again be needed.” Such language discloses Modair’s continuing reliance on Carpio’s services, for which he would naturally make himself available at Modair’s disposal. In sum, Carpio’s engagement, if it were at all project-based at the outset; had already ripened to regular status.
Finally, the Court lends no evidentiary weight to the Resignation Letter since a resignation without acceptance produces no legal effect. While Modair presented the Resignation Letter, it did not prove its assent thereto. Going into the substance thereof, the Resignation Letter merely informed Modair “that the undersigned will tender his voluntary resignation x x x due to career advancement[,]” without so much as a reference to his then-engagement Finally, as aptly pointed out by the NLRC, the Resignation Letter dated February 14, 2000 is contradicted by the Certificate of Employment, attesting to Carpio’s engagement from October 27, 1998 to April 10, 2013.
(2) Carpio Was Not Illegally Dismissed
Nevertheless, while the Court accords Carpio’s regular employment status the Court finds that he was not illegally dismissed.
The point of reference of Carpio’s cause of action for illegal dismissal was the NYK Project. Following completion thereof, Carpio claimed that Modair no longer provided him any work despite numerous pending construction projects. However, Modair’s Deputy General Manager established that, after the NYK Project, Modair’s ongoing projects had no need for an electrician, and that, even when Carpio was offered a project in Palawan, he declined, owing to the distance from his family. Essentially being a regular employee in the construction industry, Carpio was “on leave” during such time.
While Modair’s assertion, that Carpio never reported for the FUNAI Project, hints at Carpio’s possible abandonment of work, such bare assertion cannot support a finding of abandonment to constitute work abandonment, (1) the employee must have failed to report for work or must have been absent without justifiable reason; and (2) there must have been a clear intention on the part of the employee to sever the employer-employee relationship as manifested by overt acts. Abandonment as a just ground for dismissal requires the deliberate, unjustified refusal of the employee to perform his employment responsibilities. Mere absence or failure to work, even after notice to return, is not tantamount to abandonment. The evidence provides no further details regarding Carpio’s possible abandonment, most damning of which would have been a return-to-work order that deliberately went unheeded. In the absence of any evidence to the contrary, Carpio remains to be Modair’s regular employee.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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