Cartagenas vs. Romago Electric Company, Inc.

An employee hired for a specific project or undertaking whose completion or termination is determined at the time of engagement is a project employee, not a regular employee, and remains so regardless of the number of successive projects for which the employee is rehired, provided the employment contract clearly stipulates the project-specific nature of the work; the employer’s dependence on available project contracts reinforces the legitimacy of project employment.

Romago Electric Company, Inc. was a general contractor engaged in electrical, mechanical, and civil engineering construction projects. It obtained contracts from real estate developers and building owners, and its workforce fluctuated with the projects it secured. The four petitioners—Jesus Miraballes, Victor Monsod, Vicente Barroa, and Mario Cartagenas—had each worked for Romago on multiple projects spanning several years. When work on the PNB Finance Complex project was suspended due to lack of funds, Romago issued a temporary lay-off memorandum effective July 12, 1986, and asked the workers to attend a meeting about the resumption of operations.

• Parties and Nature of Employment: Private respondent Romago Electric Company, Inc. was a general contractor whose business consisted of contracting and sub-contracting for specific building construction projects—electrical, mechanical, and civil engineering works. Petitioners Jesus N. Miraballes, Victor C. Monsod, Vicente Barroa, and Mario Cartagenas were employed by Romago in connection with particular construction projects. Each was assigned to a succession of projects over several years, as documented in their employment records:

  • Jesus N. Miraballes — assigned to L. Towers (1979–1980), National Bookstore, PNRC-MHQ Building, A. Payumo’s Residence, State Center, FEBTC Building, SMC Complex (1981–1984), and PNB Finance Complex (1984–1986).
  • Victor C. Monsod — assigned to MMRH Project (1976–1980), Manila Hotel, PNB Project (1981–1984), Manila Hotel again, and PNB Finance Center (1984–1986).
  • Vicente Barroa — assigned to SMC Hoc. Project (1982–1985) and PNB Finance Complex (1985–1986).

  • Mario Cartagenas — assigned to PNB Finance Complex (1982–1986).

  • Employment Documentation: Before being assigned to a project, each applicant filled out an employment application form and underwent a pre-hiring examination. Upon acceptance, the worker signed an agreement stating: “I hereby agree to the foregoing conditions and accept my employment for a fixed period and from the above mentioned Project/Assignment only.” The application form specified the project, position, effectivity date, salary, and the condition “Hired for above project only.” Thereafter, the employee received an assignment slip stating that “His employment will terminate upon completion/stoppage of the project or terminated earlier for cause.”

  • Lay-off and Complaint: Effective July 12, 1986, petitioners were temporarily laid off through a memorandum after work on the PNB Finance Complex was suspended due to lack of funds. They were informed that a meeting regarding resumption of operations would be held on July 16, 1986. On July 28, 1986, petitioners filed the complaint for illegal dismissal. Before Romago received a copy of the summons (actual receipt was August 22, 1986), individual petitioners re-applied with Romago and were assigned to its Robinson-EDSA project on various dates in early August 1986.

• Classification as Regular Employees: Petitioners maintained that they were regular employees because their work—electrical and related services—was usually necessary and desirable to Romago’s business. They argued that their continuous service over many years and across multiple projects entitled them to regular status under Article 280, and that the NLRC committed grave abuse of discretion in ruling otherwise.

• Invocation of Prior Supreme Court Resolution: Petitioners invoked the Court’s resolution in Romago Electric Company, Inc. vs. Romago Electric United Workers Union-Christian Labor Organization (REWU-CLOP), G.R. No. 79774, February 1, 1988, where the petition was dismissed, implying it supported their position. They later disclosed that they had organized a new union in March 1988, although they had alleged in their complaint that they did not belong to any union.

• Project Employment: Private respondent Romago Electric Company, Inc. countered that petitioners were project employees, as established by the express terms of their employment application forms and assignment slips. These documents showed that each engagement was for a specific project only and would terminate upon the project’s completion or stoppage.

• Legitimate Lay-off and Rehiring: Romago argued that the July 12, 1986 lay-off was a temporary measure caused by the suspension of the PNB Finance Center project due to lack of funds, and that petitioners were rehired as soon as a new project (Robinson-EDSA) became available—conduct consistent with project employment rather than illegal dismissal.

• Supporting Precedent: The NLRC, as co-respondent, relied on Sandoval Shipyards, Inc. vs. NLRC, 136 SCRA 675 (1985), to argue that the nature of Romago’s business as a contractor dependent on project-specific contracts made project employment the appropriate classification, and that successive rehiring does not convert project employees into regular employees.

• Classification of Employment: Whether the petitioners were project employees or regular employees under Article 280 of the Labor Code.
• Grave Abuse of Discretion: Whether the National Labor Relations Commission committed grave abuse of discretion in finding that petitioners were project employees and that their lay-off was not illegal dismissal.

• Classification of Employment: The petitioners were correctly classified as project employees. Their employment contracts expressly stipulated that each engagement was for a fixed period co-terminous with a specific project. The assignment slips unequivocally provided that employment would terminate upon completion or stoppage of the project. The fact that petitioners worked on successive projects for many years did not convert them into regular employees; project employees remain project employees regardless of the number of projects for which they have been rehired. The nature of Romago’s business—wholly dependent on contracts it secures from developers and builders—made it impracticable to maintain a permanent workforce, and requiring it to carry workers even when no projects were available would be “extremely burdensome.” The ruling in Sandoval Shipyards, Inc. vs. NLRC was directly applied: employees of a contractor that only accepts specific work contracts are project employees whose engagement ends with the project.

• Grave Abuse of Discretion: The NLRC did not commit grave abuse of discretion. Its finding that petitioners were project employees was supported by substantial evidence, including the employment application forms containing the workers’ written acceptance of project-specific hiring, and the assignment slips. Under settled rule, findings of fact of labor officials, when supported by substantial evidence, are generally conclusive and binding upon the Supreme Court. The prior case Romago vs. REWU-CLOP was inapposite because it concerned certification election, not employment status, and petitioners were not members of the union involved in that dispute.

• Project Employment under Article 280 — An employee is a project employee 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 engagement. The employment is automatically terminated upon completion or stoppage of the project. The number of projects in which an employee has worked, or the aggregate length of service, does not by itself transform project employment into regular employment, absent evidence that the project-specific contracts were a subterfuge to evade security of tenure.

• Conclusiveness of NLRC Factual Findings — Findings of fact made by labor officials, when supported by substantial evidence, are generally conclusive and binding on the Supreme Court in a petition for certiorari. The Court will not re-evaluate factual determinations absent a clear showing of grave abuse of discretion, misapprehension of facts, or lack of evidentiary support.

• “The fact that the complainants worked for the respondent under different project employment contracts for so many years could not be made a basis to consider them as regular employees for they remain project employees regardless of the number of projects in which they have worked.” — This passage encapsulates the ratio decidendi that repeated rehiring does not alter the project nature of each discrete engagement.

• “It would be extremely burdensome for their employer who, like them, depends on the availability of projects, if it would have to carry them as permanent employees and pay them wages even if there are no projects for them to work on.” — This line underscores the economic reality underpinning the project employment exception in industries reliant on finite, externally sourced contracts.

• Sandoval Shipyards, Inc. vs. NLRC, 136 SCRA 675 (1985) — Followed as controlling precedent. The Court applied its ruling that workers in a shipyard that depends on contract work for shipbuilding and repair are project employees whose employment ends with the specific project, mirroring the situation of a general electrical contractor.

• Romago Electric Company, Inc. vs. Romago Electric United Workers Union-Christian Labor Organization (REWU-CLOP), G.R. No. 79774, February 1, 1988 — Distinguished. The issue in that case was certification election, not the employment status of the individual workers, and petitioners were not members of the union involved.

• Edi-Staff Builders International, Inc. vs. Leogardo, Jr., 152 SCRA 453; Asiaworld Publishing House, Inc. vs. Ople, 152 SCRA 219; and other cases — Cited as part of the established line of authority holding that factual findings of labor officials are conclusive upon the Supreme Court when supported by substantial evidence.

• Article 280, Labor Code — The provision defines regular and casual employment, with the exception that employment is not regular “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.” The Court applied this exception because the petitioners’ employment contracts and assignment slips fixed their tenure to the duration of identified construction projects, and the termination of each engagement was predetermined.

Justices Narvasa, Cruz, Gancayco, and Medialdea concurred.