Inocentes vs. R. Syjuco Construction, Inc.

A construction employee engaged to perform tasks necessary and desirable to the employer’s usual business, who is repeatedly and continuously rehired for various short-term projects without being informed at the time of each engagement of the particular project’s duration and scope, is a regular employee; project completion is not a just or authorized cause for dismissal, and the employer’s failure to file termination reports with the DOLE is an indication that the worker is not a project employee.

R. Syjuco Construction, Inc. (RSCI) operated a construction business undertaking short-term projects such as renovation or construction of bank branches and mall stores. For its manpower needs, RSCI hired construction workers — masons and carpenters — whose contracts were structured to be co-terminous with the particular projects to which they were assigned. Petitioners Salvador Inocentes Jr. and Agapito Inocentes were first engaged as carpenter and mason, respectively, in 2005; King Marvin Inocentes was hired as a carpenter in 2007; and Dennis Catangui as a carpenter in 2008. Their engagements spanned numerous projects over more than a decade. In February and May 2016, RSCI’s foreman twice directed petitioners to report for another short-term project; they failed to do so. On June 9, 2016, petitioners filed a complaint for illegal dismissal and money claims under the single entry approach (SEnA).

• Nature of Business and Hiring Practice: RSCI was a construction company engaged in short-term projects. It hired construction workers such as masons and carpenters and informed them that their employment was co-terminous with the particular project to which they were assigned. No written employment contracts were issued to petitioners; RSCI relied on a practice of informing workers orally of the project for which they were needed.

• Petitioners’ Engagement and Work History: Salvador Inocentes Jr. was hired as a carpenter in 2005, and Agapito Inocentes as a mason in the same year. King Marvin Inocentes was engaged as a carpenter in 2007, and Dennis Catangui likewise as a carpenter in 2008. Between 2013 and 2015, each was assigned to numerous separate projects of short duration. For example, Salvador Inocentes Jr. worked on ten distinct projects from May 2013 to November 2015, including the BDO BGC J.Y. Campus, Edward Hernandez Residence, BDO UN Avenue, and BDO City of Dreams, with individual engagements lasting from a few days to a few months. The other petitioners had similar sequences of multiple short-term assignments. RSCI produced a summary of these assignments before the Labor Arbiter but that summary merely listed the projects after the fact; it did not reflect that petitioners had been informed at the start of each engagement of the project’s specific scope and duration.

• Employer’s Compliance with DOLE Requirements: RSCI did not file the termination reports required by DOLE Department Order No. 19, series of 1993, upon the completion of each construction project. Further, petitioners were never paid a completion bonus, a benefit typically associated with project-based employment in the construction industry.

• Quitclaims and Alleged Termination: Petitioners had signed quitclaims which RSCI presented as proof of receipt of 13th month pay and other benefits, not as instruments of termination. In February and May 2016, RSCI’s foreman twice directed petitioners to report for another short-term project, but they did not. Petitioners thereafter claimed they had been terminated from employment without just or authorized cause. RSCI maintained that their failure to report was immaterial because the employment had already ended upon the completion of their last respective projects, and that the foreman’s instructions were merely for another temporary engagement.

• Lower Tribunals’ Factual Findings: The Labor Arbiter found that petitioners belonged to a work pool whose engagements were intermittent, that they were not paid during temporary breaks, and that they were free to seek other employment. The NLRC, however, found that petitioners had been continuously rehired for more than five years, performing work necessary and desirable to RSCI’s business, and that no valid notice of project employment was given.

• Regular Employment Status: Petitioners maintained that they were regular employees because they had been repeatedly and continuously hired for more than ten years without any interruption or break in the employment relationship. They contended that RSCI failed to comply with the reportorial requirements of DOLE Department Order No. 19, series of 1993, which mandates the submission of a termination report after every project completion, and that this failure indicated they were not project employees. They further argued that they were never issued any written employment contract, and thus were not aware that their employment was project-based. The absence of any completion bonus — a standard benefit for project employees in the construction industry — reinforced their claim of regular status.

• Illegal Dismissal: Petitioners asserted that as regular employees, they could only be dismissed for just or authorized causes under Article 279 of the Labor Code. The mere expiration or completion of a construction project was not among those causes; their termination was therefore illegal.

• Timeliness of the Petition: RSCI argued that the petition should be dismissed for having been filed on August 28, 2018, two days beyond the thirty-day extended period which allegedly expired on August 26, 2018.

• Project Employment Status: RSCI countered that petitioners were project employees whose employment was validly terminated upon the completion of each construction project to which they had been assigned. The failure to file DOLE termination reports was not fatal because RSCI had substantially complied with all other requirements of Department Order No. 19. The signed quitclaims and petitioners’ own acknowledgement that they were laid off due to project completion were sufficient proof that they were informed of the project-based nature of their employment. Project completion, it was argued, is a valid cause for termination.

• Reliance on Parallel CA Ruling: RSCI insisted that the Court of Appeals correctly applied the ruling in CA-G.R. SP No. 150606, which involved similarly situated workers of the same employer and had declared them project employees.

• Timeliness: Whether the petition for review on certiorari was filed out of time.

• Nature of Employment: Whether petitioners were project employees or regular employees.

• Monetary Awards: Whether petitioners were entitled to backwages, separation pay, service incentive leave pay, attorney’s fees, and legal interest.

• Timeliness: The petition was timely filed. The last day of the thirty-day extended period fell on Sunday, August 26, 2018. The following day, August 27, 2018, was a regular holiday. Pursuant to A.M. 00-2-14-SC — which ordains that when the last day of a filing period falls on a Saturday, Sunday, or legal holiday, the time does not run until the next working day — the petition’s filing on August 28, 2018, the next working day, was within the reglementary period.

• Nature of Employment: Petitioners were regular employees, not project employees. The principal test to determine project employment is whether the employee was assigned to carry out a particular project, the duration and scope of which were specified at the time of engagement. RSCI bore the burden of proving that petitioners were so informed at the commencement of each project. The summary of project assignments it submitted fell short of such proof: the summary merely listed prior deployments; it contained no showing that petitioners had been notified at the point of hiring of the precise scope and duration of the specific project for which they were being engaged. RSCI’s belated assertion, raised only in its pleadings before the Labor Arbiter, that petitioners had been briefed orally was unsubstantiated.

  The continuous and repeated rehiring of petitioners for more than a decade — performing carpentry and masonry work indispensable to RSCI’s construction business — established that their services were necessary and desirable to the employer’s usual trade. Notably, RSCI itself admitted that days or months after a project, it would inform petitioners that they would be called upon for the next project, indicating that the employment relationship did not truly terminate upon each project’s completion.

  The failure to file the termination reports required by DOLE Department Order No. 19 upon the completion of each project, as well as the absence of any completion bonus, were additional indicia that petitioners were not project employees. Under Freyssinet Filipinas Corp. v. Lapuz, such failure confirms that the workers are regular employees.

  The ruling was dictated by the Supreme Court’s prior decision in Dominic Inocentes, et al. v. R. Syjuco Construction, Inc./Arch. Ryan I. Syjuco (G.R. No. 237020, July 29, 2019). That case — involving the same employer and identically situated construction workers — squarely held that RSCI’s workers were regular employees and that their dismissal based on project completion was illegal. Although Inocentes was under reconsideration at the time, the decision stood until vacated, and the factual and legal identity of the two cases compelled the same result.

  As regular employees, petitioners could only be dismissed for just or authorized causes under Article 279 of the Labor Code. Project completion is not such a cause; their dismissal was therefore illegal.

• Monetary Awards: The award of backwages and separation pay was proper, computed from the date of illegal dismissal until the finality of the decision. Service incentive leave pay was additionally granted because RSCI had not afforded petitioners this benefit. Attorney’s fees equivalent to ten percent of the total monetary award were justified under Article 2208(7) of the Civil Code, the action being one for recovery of wages of laborers and skilled workers. Interest at the rate of six percent per annum on the total award was imposed from the finality of the decision until full satisfaction, consistent with Nacar v. Gallery Frames.

• Principal Test for Project Employment — A project employee is one assigned to carry out a particular project or undertaking, the duration and scope of which are specified at the time of engagement. The employer bears the burden of proving that the employee was informed of these parameters at the commencement of the employment. A summary of post-assignment project lists does not constitute the required prior notice.

• Indicia of Regular Employment in the Construction Industry — When a construction worker is repeatedly and continuously rehired for numerous short-term projects over a long period, performing tasks necessary and desirable to the employer’s business, and the employer fails to (a) submit the DOLE termination report upon each project’s completion and (b) pay the completion bonus, the worker is deemed a regular employee rather than a project employee.

• Invalidity of Project Completion as Ground for Dismissal — The completion of a project or a phase thereof is not a just or authorized cause for the termination of a regular employee under Article 279 of the Labor Code.

• Computation of Time When Last Day Falls on a Non-Working Day — Under A.M. 00-2-14-SC, when the last day of a filing period falls on a Saturday, Sunday, or legal holiday, the period is extended to the next working day. A petition filed on that next working day is timely.

• “[T]he principal test to determine if an employee is a project employee is whether he or she is assigned to carry out a particular project or undertaking, which duration or scope was specified at the time of engagement.”

• “[T]he failure on the part of the employer to file with the DOLE a termination report every time a project or its phase is completed is an indication that the workers are not project employees but regular ones.”

• “[P]roject completion is not a valid cause to terminate regular employees.”

• Dominic Inocentes, et al. v. R. Syjuco Construction, Inc./Arch. Ryan I. Syjuco, G.R. No. 237020, July 29, 2019 — Controlling precedent. The case involved the same employer and similarly situated construction workers. The ruling that the workers were regular employees and that their dismissal for project completion was illegal was applied as on all fours with the present case.

• Dacuital v. L.M. Camus Engineering Corp. — Cited for the definition and principal test of project employment.

• Freyssinet Filipinas Corp. v. Lapuz — Applied for the rule that the employer’s failure to file the DOLE termination report upon project completion indicates that the workers are regular employees.

• Nacar v. Gallery Frames, 716 Phil. 267 (2013) — Applied as authority for the imposition of six percent interest per annum on the monetary award from finality until full satisfaction.

• Article 279, Labor Code (now renumbered) — The provision enumerating the just and authorized causes for termination of employment. Project completion was held not to fall within any of those causes, making the dismissal of regular employees on that ground illegal.

• DOLE Department Order No. 19, series of 1993 (Guidelines Governing the Employment of Workers in the Construction Industry) — Mandates the employer to submit a termination report to the DOLE upon completion of each construction project. Non-compliance was treated as an indication that the workers concerned were not project employees but regular ones.

• Article 2208(7), Civil Code — Permits the recovery of attorney’s fees in actions for the recovery of wages of laborers and skilled workers. The ten percent award of attorney’s fees was anchored on this provision.

• A.M. 00-2-14-SC (Re: Computation of Time When the Last Day Falls on a Saturday, Sunday, or Legal Holiday) — Applied to deem the petition timely filed: although the extension expired on a Sunday followed by a regular holiday, the petition was filed on the next working day.

Peralta, C.J. (Chairperson), Caguioa, Reyes, Jr., and Lopez, JJ.