ASG Law

Tag: Regular Employee

  • Due Process and Employee Dismissal: Balancing Just Cause with Procedural Rights

    In Augorio A. Dela Rosa v. ABS-CBN Corporation, the Supreme Court addressed the critical balance between an employer’s right to dismiss an employee for just cause and the employee’s right to due process. The Court ruled that while serious misconduct justified Dela Rosa’s dismissal, ABS-CBN failed to follow proper procedure, specifically regarding the second notice requirement. This failure to fully inform Dela Rosa of the final decision and its grounds, despite the validity of the cause for termination, constituted a violation of his procedural due process rights, entitling him to nominal damages.

    When Workplace Misconduct Meets Due Process: Navigating Termination Rights

    Augorio A. Dela Rosa, a video editor at ABS-CBN, faced dismissal after an incident involving intoxication and misconduct towards a female co-worker. While ABS-CBN cited this incident as a just cause for termination, they also pointed to the expiration of Dela Rosa’s fixed-term contract. This dual justification raised questions about the real reason for his dismissal and whether proper procedures were followed. The central legal question became: Can an employer bypass due process requirements when a valid cause for termination exists alongside a fixed-term contract?

    The case began with Dela Rosa filing a complaint for illegal dismissal, arguing he was a regular employee and his termination was unlawful. ABS-CBN countered that Dela Rosa was a fixed-term employee whose contract had simply expired. They also argued that his misconduct warranted dismissal. The Labor Arbiter (LA) initially sided with Dela Rosa, declaring his dismissal illegal and awarding backwages, separation pay, and damages. However, the National Labor Relations Commission (NLRC) affirmed the LA’s decision with a modification, deleting the award for moral and exemplary damages.

    The Court of Appeals (CA) reversed the NLRC’s ruling, finding Dela Rosa to be a regular employee who was validly dismissed for just cause. The CA emphasized the serious nature of Dela Rosa’s misconduct and the company’s compliance with notice and hearing requirements. This led Dela Rosa to petition the Supreme Court, questioning whether the CA erred in its assessment of his dismissal.

    In its analysis, the Supreme Court first addressed the nature of Dela Rosa’s employment. The Court emphasized that for a fixed-term employment contract to be valid, both parties must have knowingly and voluntarily agreed to the fixed period. Importantly, this agreement must occur on relatively equal terms, with no employer dominance. Furthermore, the fixed term cannot be imposed to prevent the employee from gaining security of tenure.

    x x x if it is apparent that the period has been imposed to preclude acquisition of tenurial security by the employee, then such period must be struck down for being contrary to law, morals, good customs, public order, and public policy.

    Applying these principles, the Court determined that Dela Rosa was a regular employee, not a fixed-term employee. The continuous renewals and extensions of his contracts over several years indicated the necessity of his work to ABS-CBN’s business. These renewals also suggested that the fixed terms were designed to prevent him from attaining regular employment status.

    Having established Dela Rosa’s status as a regular employee, the Court then assessed whether there was just cause for his dismissal. Article 297 of the Labor Code (formerly Article 282) outlines the just causes for terminating an employee. This includes serious misconduct. The Court agreed with the CA that Dela Rosa’s actions constituted serious misconduct, as he violated company policies and ethics through his behavior towards a female co-worker.

    Misconduct, in the context of labor law, involves improper or wrongful conduct that transgresses established rules. To justify dismissal, the misconduct must be grave and aggravated, not merely trivial. In Dela Rosa’s case, the Court found that his intoxication at work and his actions towards his co-worker met the threshold for serious misconduct. This misconduct not only violated company rules but also reflected negatively on the company’s values.

    However, the Court found that ABS-CBN failed to adhere to the procedural requirements for terminating Dela Rosa’s employment. As a matter of due process, an employer must provide two written notices to the employee. The first notice informs the employee of the specific acts or omissions that could lead to dismissal. The second notice informs the employee of the employer’s decision to dismiss them, along with the grounds for the decision.

    In this case, while Dela Rosa received the first notice (the show cause memorandum), he did not receive a valid second notice. The memorandum from September 1, 2015, indicated that management had decided to impose the penalty of dismissal, but that penalty was not actually enforced. The company stated that Dela Rosa’s contract had already expired and his subsequent program contract no longer covered the incident. This meant that Dela Rosa was not properly informed of his termination and the reasons behind it.

    The lack of a proper second notice constituted a violation of Dela Rosa’s right to procedural due process. The Supreme Court has consistently held that even when a just cause for dismissal exists, failure to comply with procedural requirements warrants an indemnity for the employee. The rationale is that while an employer should not be forced to continue employing someone guilty of serious misconduct, the employee’s right to due process must still be respected.

    The Court, therefore, upheld the validity of Dela Rosa’s dismissal but ordered ABS-CBN to pay him nominal damages for violating his procedural due process rights. This ruling underscores the importance of following proper procedures in termination cases, even when just cause exists. The amount of nominal damages was set at P30,000.00, in line with established jurisprudence on similar cases.

    The table below presents a comparison of the arguments made by Dela Rosa and ABS-CBN regarding the reason for termination:

    Dela Rosa’s Argument ABS-CBN’s Argument
    Illegal dismissal due to being a regular employee and termination not being for just or authorized cause. Termination due to the expiration of a fixed-term contract and, alternatively, for just cause (serious misconduct).

    The Supreme Court’s decision emphasizes that employers must adhere to the two-notice rule when terminating employees, regardless of whether there is a valid cause for dismissal. Failure to do so can result in liability for nominal damages, even if the dismissal itself is upheld.

    FAQs

    What was the key issue in this case? The key issue was whether ABS-CBN legally dismissed Augorio Dela Rosa, considering his status as a regular employee, the alleged just cause for dismissal, and the procedural requirements for termination.
    Was Dela Rosa considered a fixed-term or regular employee? The Supreme Court determined that Dela Rosa was a regular employee, as his contracts were repeatedly renewed, and the fixed terms appeared designed to prevent him from gaining tenure.
    What constituted the just cause for Dela Rosa’s dismissal? Dela Rosa’s dismissal was based on serious misconduct, stemming from his intoxication at work and his inappropriate behavior towards a female co-worker.
    What procedural requirements did ABS-CBN fail to meet? ABS-CBN failed to provide a valid second notice informing Dela Rosa of his termination and the specific grounds for the decision, violating his right to procedural due process.
    What is the two-notice rule in termination cases? The two-notice rule requires employers to provide a first notice informing the employee of the grounds for potential dismissal and a second notice informing the employee of the decision to terminate and its justification.
    What were the consequences of ABS-CBN’s failure to follow proper procedure? Although the dismissal was upheld, ABS-CBN was ordered to pay Dela Rosa nominal damages for violating his right to procedural due process.
    What is the significance of nominal damages in this context? Nominal damages serve to acknowledge the violation of an employee’s rights, even when the dismissal itself is justified, reinforcing the importance of due process.
    Can an employer bypass due process if there is just cause for termination? No, an employer cannot bypass due process, even if there is just cause. Procedural requirements must still be followed to ensure fairness and protect employee rights.
    What happens if the employee is in serious misconduct but terminated without following proper procedure? If the dismissal is for just cause but procedurally infirm, the lack of statutory due process should not nullify the dismissal. However, the employer should indemnify the employee for violation of his statutory rights.

    This case serves as a crucial reminder for employers to prioritize due process when terminating employees, regardless of the perceived validity of the cause. Adhering to procedural requirements protects employee rights and minimizes potential legal repercussions. Proper documentation and adherence to the two-notice rule are essential for ensuring a fair and legally sound termination process.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Dela Rosa v. ABS-CBN Corporation, G.R. No. 242875, August 28, 2019

  • Regular vs. Project Employment: Employer’s Duty to Prove Employment Type

    In Inocentes v. R. Syjuco Construction, Inc., the Supreme Court held that construction workers initially hired as project employees were, in fact, regular employees due to the employer’s failure to prove that the employees were informed of their project-based employment status at the time of hiring. This ruling underscores the employer’s responsibility to clearly communicate the terms and conditions of employment, particularly the specific nature and duration of a project-based job, to avoid the presumption of regular employment. Employers must provide substantial evidence, such as employment contracts and DOLE reports, to support claims of project employment; otherwise, employees are deemed regular and entitled to corresponding rights and benefits.

    Burden of Proof: When Construction Jobs Lead to Regular Status

    Dominic Inocentes, Jeffrey Inocentes, Joseph Cornelio, and Reymark Catangui filed a complaint against R. Syjuco Construction, Inc. (RSCI), alleging illegal dismissal and seeking various monetary claims. The central legal question revolved around whether the petitioners were project employees, as claimed by RSCI, or regular employees entitled to greater job security and benefits. The Labor Arbiter initially sided with RSCI, but the National Labor Relations Commission (NLRC) reversed this decision, finding the workers to be regular employees who were illegally dismissed. The Court of Appeals (CA) then reinstated the Labor Arbiter’s ruling, leading to the Supreme Court review.

    The Supreme Court emphasized the distinction between regular and project employees, referencing Article 295 of the Labor Code, which defines a regular employee as one engaged to perform tasks usually necessary or desirable in the employer’s business, without falling into the categories of fixed, project, or seasonal employment. Conversely, a project employee’s employment is fixed for a specific project, the completion of which is made known at the time of engagement. The Court cited Dacuital vs. L.M. Camus Engineering Corp., stressing that the key determinant is whether the employee was assigned to a particular project with a specified duration made known upon hiring.

    A crucial element in determining project employment is the notice given to employees at the time of hiring, informing them that their employment is tied to a specific project. In this case, the Supreme Court found that RSCI failed to provide such prior notice. The ‘summary of project assignments’ presented by RSCI was deemed insufficient as it merely listed past projects without indicating that the employees were informed of their project-based status at the time of engagement. This distinction is vital because it highlights the employer’s responsibility to clearly communicate the terms of employment upfront.

    The Court noted that the summary only listed projects after the employees were assigned, failing to demonstrate that they were informed at the time of engagement that their work was project-specific. The absence of a clear employment contract specifying the project’s duration and scope further weakened RSCI’s case. It was only in their Rejoinder that RSCI claimed employees were briefed about the nature of their work, but this claim lacked substantial supporting evidence.

    Moreover, the nature of the employees’ tasks supported the argument for regular employment. RSCI’s admission that employees were informed about potential future projects after completing previous ones indicated the necessity and desirability of their work to the company’s usual business. The fact that RSCI coordinated with and notified the employees about upcoming projects suggested that their services were consistently required.

    The Supreme Court also highlighted RSCI’s failure to submit a report to the Department of Labor and Employment (DOLE) regarding the termination of the employees’ employment due to alleged project completion. Quoting Freyssinet Filipinas Corp. vs. Lapuz, the Court stated:

    the 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.

    This requirement reinforces the importance of adhering to labor regulations and providing proper documentation to support claims of project-based employment. Compliance with DOLE reporting requirements is a key factor in determining whether employees are genuinely project-based.

    The burden of proof lies with the employer to demonstrate that the employee is a project employee. The employer must establish that (a) the employee was assigned to carry out a particular project or undertaking; and (b) the duration and scope of which was specified at the time of engagement. In this case, RSCI failed to meet this burden, as they did not adequately prove that the employees were informed of their project-based employment status at the time of hiring.

    The absence of a written contract specifying the project’s duration and scope, while not automatically making one a regular employee, serves as critical evidence that employees were informed of their work’s nature and duration at the start of their engagement. The Supreme Court reiterated that in the absence of such evidence, the presumption favors regular employment. Since RSCI did not discharge their burden of proof, the NLRC’s finding that the employees were regular employees was upheld.

    As regular employees, the petitioners could only be dismissed for a just or authorized cause and with due process. The failure to observe these requirements led the Court to affirm the NLRC’s finding of illegal dismissal. Even if the employees’ termination was due to the completion of a project, this would not constitute a valid cause for dismissing regular employees. Furthermore, the lack of notice of termination violated their right to due process.

    The Court also sustained the NLRC’s award of service incentive leave pay, backwages, and separation pay to the employees. Separation pay was deemed appropriate due to strained relations between the parties and the possibility that the employees’ former positions were already filled. Finally, the Court upheld the award of attorney’s fees, as the employees were compelled to litigate to protect their rights and imposed a 6% per annum interest on all monetary awards from the finality of the decision until fully paid.

    FAQs

    What was the key issue in this case? The central issue was whether the petitioners were project employees or regular employees, and whether they were illegally dismissed. The court focused on whether the employer adequately informed the employees of their project-based employment at the time of hiring.
    What is the difference between a regular and project employee? A regular employee performs tasks usually necessary or desirable in the employer’s business, while a project employee is hired for a specific project with a known completion date. The key distinction lies in the nature and duration of the employment.
    What is the employer’s responsibility in project-based employment? The employer must clearly inform the employee at the time of hiring that the employment is project-based and specify the project’s duration and scope. Failure to do so can result in the employee being considered a regular employee.
    What evidence is needed to prove project employment? Evidence includes employment contracts specifying the project’s duration and scope, and reports filed with the DOLE regarding the termination of employment upon project completion. Without this documentation, the presumption is that the employee is regular.
    What happens if an employer fails to prove project employment? If the employer fails to prove that the employee was informed of their project-based employment at the time of hiring, the employee is presumed to be a regular employee with corresponding rights and benefits. This includes protection against illegal dismissal.
    Can regular employees be dismissed due to project completion? No, regular employees cannot be dismissed solely due to project completion. Termination must be for a just or authorized cause, and with due process, as required by the Labor Code.
    What are the consequences of illegal dismissal? Employees who are illegally dismissed are entitled to backwages, separation pay (if reinstatement is not feasible), service incentive leave pay, and attorney’s fees. These remedies aim to compensate the employee for the unlawful termination.
    What is the significance of DOLE reports in determining employment status? Filing termination reports with DOLE after project completion is a crucial indicator that employees were indeed project-based. Absence of these reports can suggest that employees were treated as regular staff, regardless of project assignments.
    Why was separation pay awarded in this case? Separation pay was awarded because reinstatement was deemed no longer feasible due to strained relations between the parties and the possibility that the employees’ positions had already been filled. This is a common remedy in illegal dismissal cases.

    This case serves as a crucial reminder for employers in the construction industry to meticulously document and communicate the terms of employment, especially for project-based positions. Failing to do so can lead to costly legal battles and the recognition of employees as regular staff, with all the attendant rights and benefits. This ruling not only protects workers’ rights but also promotes transparency and fairness in employment practices.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Inocentes, et al. v. R. Syjuco Construction, Inc., G.R. No. 237020, July 29, 2019

  • Regular vs. Project Employment: Defining Worker Rights and Employer Obligations in the Philippines

    In Inocentes v. R. Syjuco Construction, Inc., the Supreme Court clarified the distinction between regular and project employees, emphasizing the employer’s burden to prove project employment. The Court ruled that employees initially hired without clear notice of project-based employment are considered regular employees, entitled to security of tenure and due process before termination. This decision protects workers from arbitrary dismissal and reinforces the importance of clear communication regarding employment terms at the time of hiring, ensuring fair labor practices in the construction industry.

    The Carpenter’s Contract: Was it a Nail in the Coffin or a Bridge to Regular Employment?

    This case revolves around the employment status of construction workers Dominic Inocentes, Jeffrey Inocentes, Joseph Cornelio, and Reymark Catangui, who filed a complaint against R. Syjuco Construction, Inc. (RSCI) for illegal dismissal and various monetary claims. The central issue is whether these workers were project employees, as the company claimed, or regular employees entitled to greater job security. The Labor Arbiter (LA) initially dismissed the illegal dismissal claim, but the National Labor Relations Commission (NLRC) reversed this decision, finding the workers to be regular employees who were illegally dismissed. The Court of Appeals (CA) then overturned the NLRC’s ruling, reinstating the LA’s decision. The Supreme Court, in turn, reviewed the CA’s decision to determine if it correctly assessed whether the NLRC had gravely abused its discretion.

    The Supreme Court began its analysis by emphasizing that determining whether an employee is regular or a project employee is a factual matter, typically beyond the scope of a Rule 45 petition. However, due to conflicting findings among the LA, NLRC, and CA, the Court deemed it necessary to review the factual evidence. It highlighted that its review of CA decisions in labor cases focuses on whether the CA correctly determined the presence or absence of grave abuse of discretion by the NLRC. This involves ascertaining the legal correctness of the CA’s ruling on the NLRC decision, which must be supported by substantial evidence.

    The Court defined “grave abuse of discretion” as rendering a judgment in a capricious, whimsical, or arbitrary manner, tantamount to a lack of jurisdiction. In labor cases, this occurs when the NLRC’s ruling is not supported by substantial evidence. Therefore, if the NLRC’s decision has a basis in evidence, law, and jurisprudence, no grave abuse of discretion can be imputed to it, and the CA must dismiss the petition challenging the NLRC decision. Article 295 of the Labor Code defines a regular employee as one engaged to perform tasks usually necessary or desirable in the employer’s business, not falling under fixed, project, or seasonal employment, or one engaged for at least a year where the work remains while the activity exists. A project employee is employed for a specified project, with the completion or termination made known at the time of engagement.

    The Court cited Dacuital vs. L.M. Camus Engineering Corp., emphasizing that a project employee is assigned to a project with a determined or determinable start and end time. The primary test is whether the employee was assigned to a specific project, with its duration or scope specified at the time of engagement. In this case, the Court found that the employer, RSCI, failed to provide prior notice to the workers that they were being engaged for a specific project. The summary of project assignments relied upon by the CA was deemed insufficient, as it only listed past assignments without indicating that the workers were informed at the time of hiring that their employment was project-based.

    The Court further noted that the summary of project assignments, in fact, supported the necessity and desirability of the workers’ tasks in RSCI’s usual business. RSCI admitted that after a project, they would inform the workers that they would be called upon for new projects, indicating that the workers’ services were continuously necessary. The failure of RSCI to submit a report to the DOLE regarding the termination of the workers’ employment due to alleged project completion further suggested that the workers were not project employees but regular ones. As the Court explained in Freyssinet Filipinas Corp. vs. Lapuz,

    the 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.

    The Supreme Court also stressed that the employer bears the burden of proving that an employee is indeed a project employee, establishing that the employee was assigned to a particular project and that the duration and scope were specified at the time of engagement. RSCI failed to prove that it informed the workers of their project-based employment status at the time of engagement. The lack of a written contract, while not determinative, serves as proof that employees were informed of the duration and scope of their work and their status as project employees. In the absence of such proof, the presumption that the employees are regular employees prevails. The Court stated in Dacuital vs. L.M. Camus Engineering Corp.,

    While the lack of a written contract does not necessarily make one a regular employee, a written contract serves as proof that employees were informed of the duration and scope of their work and their status as project employee at the commencement of their engagement. There being none that was adduced here, the presumption that the employees are regular employees prevails.

    The Court found that RSCI failed to discharge its burden of proving that the workers were project employees, the NLRC properly found them to be regular employees. Consequently, as regular employees, the workers could only be dismissed for a just or authorized cause and upon observance of due process. Since these requirements were not met, the Court upheld the NLRC’s finding that the workers were illegally dismissed. The Court further noted that even if it were to rely on RSCI’s claim that the workers ceased to work at the end of their purported project contract, this would not constitute a valid cause for terminating regular employees, and there was no showing that the workers were given notice of their termination, violating their right to due process.

    Thus, the Supreme Court concluded that the CA erred in ascribing grave abuse of discretion to the NLRC and affirmed the NLRC’s decision to award service incentive leave pay, full backwages, and separation pay to the workers. Separation pay was granted due to strained relations between the parties and the possibility that the workers’ positions were already being held by new employees. Finally, the Court sustained the award of attorney’s fees and imposed a 6% per annum interest on all monetary awards from the finality of the decision until fully paid. The Court also underscored that even if we rely on the averment of respondents that petitioners ceased to work at the end of their purported project contract, this assertion will not hold water since it is not a valid cause to terminate regular employees.

    FAQs

    What was the key issue in this case? The key issue was whether the construction workers were project employees, as claimed by the company, or regular employees entitled to greater job security and due process before termination.
    What is the difference between a regular and project employee? A regular employee performs tasks necessary for the employer’s business and has more job security. A project employee is hired for a specific project, with employment tied to the project’s completion.
    What did the Supreme Court rule in this case? The Supreme Court ruled that the workers were regular employees because the company failed to prove they were informed of their project-based employment status at the time of hiring. They were thus illegally dismissed.
    What is the employer’s responsibility when hiring project employees? The employer must clearly inform the employee at the time of hiring that the employment is for a specific project and specify the project’s duration and scope.
    What happens if the employer does not report the termination of project employment to the DOLE? Failure to report the termination of project employment to the DOLE can indicate that the workers are not project employees but regular ones, strengthening their claim to regular employment status.
    What is the significance of a written contract in determining employment status? While not the sole determinant, a written contract serves as evidence that employees were informed of their project-based status and the duration/scope of their work at the start of their employment.
    What is an employee entitled to if illegally dismissed? An employee who is illegally dismissed is typically entitled to backwages, separation pay (if reinstatement is not feasible), service incentive leave pay, and attorney’s fees.
    What is the definition of “grave abuse of discretion” in the context of labor cases? In labor cases, “grave abuse of discretion” occurs when the NLRC’s ruling is not supported by substantial evidence, indicating a capricious or arbitrary exercise of power.
    Why was separation pay awarded in this case? Separation pay was awarded because reinstatement was no longer feasible due to strained relations between the parties and the likelihood that their positions were already filled.

    This case underscores the importance of clearly defining employment terms at the time of hiring, particularly in the construction industry. Employers must ensure that employees are fully aware of their employment status and the specific terms of their engagement to avoid legal disputes and ensure fair labor practices. The Supreme Court’s decision reinforces the protection afforded to regular employees under Philippine labor law.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Dominic Inocentes, Jeffrey Inocentes, Joseph Cornelio And Reymark Catangui, Petitioners, v. R. Syjuco Construction, Inc. (RSCI) / Arch. Ryan I. Syjuco, Respondents., G.R. No. 237020, July 29, 2019

  • Project vs. Regular Employment: Security of Tenure and Employee Rights in the Philippines

    In Ramon E. Mirandilla, Ranil D. Atuli, and Edwin D. Atuli v. Jose Calma Development Corp. and Jose Gregorio Antonio C. Calma, Jr., the Supreme Court ruled that the employees were regular employees, not project employees, and were thus illegally dismissed. This decision underscores the importance of clearly defining the terms of employment at the time of hiring. Employers must provide substantial evidence of project-based employment to avoid regularizing employees who perform tasks necessary for the company’s usual business.

    Navigating Employment Status: When is a Worker a Regular Employee?

    This case revolves around the employment status of Ramon, Ranil, and Edwin, who claimed they were regular employees of Jose Calma Development Corp. (JCDC) and were illegally dismissed. JCDC, however, argued that they were project employees whose employment was coterminous with specific construction projects. The central legal question is whether JCDC provided enough evidence to prove that the workers were genuinely project employees, and not regular employees entitled to security of tenure. The Supreme Court (SC) reviewed the case to determine if the lower courts correctly assessed the evidence and applied the relevant labor laws.

    The Labor Code distinguishes between regular and project employees to protect workers’ rights. Article 295 (formerly 280) defines a regular employee as someone performing tasks “usually necessary or desirable in the usual business or trade of the employer.” Conversely, a project employee’s work is “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.” This distinction is crucial because regular employees are entitled to greater job security, requiring just cause for termination.

    The Supreme Court has established specific criteria for determining project employment status. Two key elements must be present: “(a) the employees were assigned to carry out a specific project or undertaking; and (b) the duration and scope of which were specified at the time the employees were engaged for that project.” These criteria ensure that employers cannot arbitrarily classify workers as project employees to avoid the obligations associated with regular employment.

    In this case, the Court found that JCDC failed to provide sufficient evidence to prove that Ramon, Ranil, and Edwin were genuinely project employees. The evidence presented, such as Weekly Time Records (WTRs), did not demonstrate that the employees were informed of the specific projects they were hired for, or the duration and scope of those projects, at the time of their engagement. The WTRs primarily showed that Ramon was moved between different project sites on a regular basis, indicating that his work was integral to JCDC’s ongoing operations rather than tied to a specific, time-bound project.

    Article 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.

    The Court also highlighted JCDC’s failure to comply with reporting requirements for project employees. According to Policy Instruction No. 20, employers of project employees must submit a termination report to the nearest public employment office after each project’s completion. The Court emphasized that: “[The Court has] consistently held that failure of the employer to file termination reports after every project completion proves that the employees are not project employees.” JCDC’s limited submission of termination reports further weakened their claim that the employees were hired on a project basis.

    The Supreme Court also noted that the absence of employment contracts detailing the project-based nature of the work raised further doubts about the validity of the project employment claims. The court has stated, “the absence of the employment contracts puts into serious question the issue of whether the employees were properly informed of their employment status as project employees at the time of their engagement, especially if there were no other evidence offered.” Without these contracts, it was difficult to ascertain whether the employees knowingly agreed to be hired for specific projects with defined durations.

    Regarding Ranil and Edwin’s quitclaims, the Court found them invalid due to insufficient consideration. The amounts they received, P6,917.47 and P7,290.06 respectively, only covered their 13th-month pay for 2015, a statutory obligation of the employer. Such minimal compensation did not adequately compensate them for waiving their rights as illegally dismissed employees. The Court reiterated that “a quitclaim in which the consideration is scandalously low and inequitable cannot be an obstacle to the pursuit of a worker’s legitimate claim.”

    The Court has set clear standards for valid quitclaims, as stated in the case of Arlo Aluminum, Inc. v. Piñon, Jr.:

    To be valid, a deed of release, waiver or quitclaim must meet the following requirements: (1) that there was no fraud or deceit on the part of any of the parties; (2) that the consideration for the quitclaim is sufficient and reasonable; and (3) that the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law. Courts have stepped in to invalidate questionable transactions, especially where there is clear proof that a waiver, for instance, was obtained from an unsuspecting or a gullible person, or where the agreement or settlement was unconscionable on its face. A quitclaim is ineffective in barring recovery of the full measure of a worker’s rights, and the acceptance of benefits therefrom does not amount to estoppel. Moreover, a quitclaim in which the consideration is scandalously low and inequitable cannot be an obstacle to the pursuit of a worker’s legitimate claim.

    The court determined that the quitclaims signed by Ranil and Edwin, in consideration of their 13th-month pay alone, did not constitute reasonable consideration for waiving their rights to potential awards like backwages and separation pay. This underscores the principle that waivers must be voluntary, fully understood, and supported by credible consideration to be legally binding.

    FAQs

    What was the key issue in this case? The central issue was whether the employees were project employees or regular employees, which determines their rights regarding termination. The Supreme Court examined if the employer sufficiently proved the employees were hired for specific projects.
    What is the difference between a project employee and a regular employee? A regular employee performs tasks necessary for the employer’s usual business and has greater job security. A project employee is hired for a specific project with a predetermined completion date.
    What evidence is needed to prove project employment status? Employers must show that employees were informed of the specific project and its duration at the time of hiring. Additionally, they must submit termination reports to the DOLE after each project’s completion.
    Why were the quitclaims of Ranil and Edwin deemed invalid? The quitclaims were considered invalid because the consideration (13th-month pay) was insufficient and did not adequately compensate them for waiving their rights as illegally dismissed employees. Valid quitclaims require reasonable and credible consideration.
    What is the significance of filing termination reports with the DOLE? Filing termination reports after each project completion is crucial to proving project employment status. Failure to do so suggests that the employees were not genuinely hired for specific projects.
    What happens if an employer fails to prove project employment? If an employer fails to prove project employment, the employees are considered regular employees and are entitled to the rights and benefits of regular employment, including security of tenure. Termination would require just cause.
    What should an employee do if asked to sign a quitclaim? An employee should carefully review the quitclaim and ensure that the consideration is fair and reasonable. If unsure, they should seek legal advice before signing to understand their rights.
    Can an employer terminate a regular employee at any time? No, regular employees can only be terminated for just or authorized causes as defined in the Labor Code. Illegal dismissal can lead to significant penalties for the employer, including backwages and separation pay.

    This case serves as a reminder to employers to clearly define the terms of employment and to comply with all legal requirements when hiring project employees. Failure to do so can result in costly litigation and damage to the company’s reputation. The decision also highlights the importance of understanding employee rights and seeking legal advice when facing potential illegal dismissal.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Mirandilla, et al. vs. Jose Calma Development Corp., G.R. No. 242834, June 26, 2019

  • Piece-Rate Workers: Regular Employment and Illegal Dismissal Under Philippine Law

    The Supreme Court held that a messenger paid on a “per-piece basis” could still be considered a regular employee with security of tenure, emphasizing that the manner of payment does not negate regular employment if the work performed is necessary for the company’s business and has been ongoing for a significant period. Consequently, the employer’s failure to comply with due process requirements in terminating the employee’s services constituted illegal dismissal.

    From Per-Piece Pay to Permanent Status: Did the Bill Sender Corporation Illegally Terminate a Messenger’s Employment?

    The case revolves around Reynaldo S. Geraldo, who worked as a delivery/messenger man for The Bill Sender Corporation, tasked with delivering bills for the Philippine Long Distance Telephone Company (PLDT). Geraldo’s compensation was on a “per-piece basis,” meaning he was paid for each bill he successfully delivered. After working in this capacity for over fourteen years, Geraldo was suddenly informed by the company’s operations manager that his employment was terminated due to alleged failure to deliver certain bills. Geraldo contested this termination, arguing that it was illegal because it lacked due process and that he was not even assigned to deliver the undelivered bills in question. The company, however, maintained that Geraldo was not a regular employee but a piece-rate worker who worked only when he pleased, and that he abandoned his job by no longer reporting for work. The central legal question is whether Geraldo, despite being paid on a per-piece basis, should be considered a regular employee with security of tenure, and whether his termination was lawful.

    The Labor Arbiter (LA) initially ruled in favor of Geraldo, declaring that he was indeed a regular employee and that the company failed to prove a just cause for his dismissal or that Geraldo abandoned his job. The LA emphasized that under Article 277(b) of the Labor Code, the burden of proving just cause for dismissal lies with the employer. The LA also pointed out that Geraldo’s work was essential to the company’s business, and his long tenure further solidified his status as a regular employee. The National Labor Relations Commission (NLRC) affirmed the LA’s decision, underscoring the company’s failure to observe the twin-notice requirement to ensure due process. The NLRC also dismissed the company’s abandonment claim, noting that Geraldo filed his complaint within a reasonable time frame.

    However, the Court of Appeals (CA) reversed the NLRC’s decision, arguing that since Geraldo was paid on a per-piece basis, he was hired on a per-result basis and not an employee of the company. The CA highlighted the practice of messengers transferring between companies based on the availability of work, implying a lack of a formal employer-employee relationship. Consequently, the CA found no basis for awarding separation pay, backwages, and other monetary benefits. This ruling led Geraldo to file a petition for review on certiorari with the Supreme Court, asserting that his status as a piece-rate employee did not negate his right to security of tenure as a regular employee.

    The Supreme Court, in its analysis, focused on the definition of a regular employee under Article 280 of the Labor Code, which includes those engaged to perform activities necessary or desirable in the usual business or trade of the employer. The Court cited Integrated Contractor and Plumbing Works, Inc. v. National Labor Relations Commission, where it was held that the test is the reasonable connection between the employee’s activity and the employer’s business. The Court noted that Geraldo’s role as a delivery/messenger man was directly linked to the company’s business of delivering bills, making his services indispensable. Therefore, the fact that Geraldo had been performing these activities for over fourteen years further solidified his claim to regular employment status.

    The Supreme Court rejected the company’s argument that Geraldo was merely a piece-rate worker, citing Hacienda Leddy/Ricardo Gamboa, Jr. v. Villegas, which clarified that payment on a piece-rate basis does not negate regular employment. As the Court stated, the term “wage” is broadly defined in Article 97 of the Labor Code as remuneration or earnings, whether fixed or ascertained on a time, task, piece or commission basis. Payment by the piece is just a method of compensation and does not define the essence of the relations. It emphasized that the nature of the activities performed, rather than the method of payment, determines the regularity of employment.

    Having established Geraldo’s status as a regular employee, the Court then examined whether his dismissal was lawful. The Court reiterated the established principle that in illegal dismissal cases, the burden of proof lies with the employer to prove just cause. The company claimed that Geraldo abandoned his job, but the Court found no evidence to support this claim. The Court noted that to justify a finding of abandonment, there must be proof of a deliberate and unjustified refusal to resume employment, accompanied by manifest acts indicating a desire to discontinue employment. The filing of the illegal dismissal complaint itself negated any intention of abandonment on Geraldo’s part.

    Furthermore, the Court found that Geraldo’s dismissal did not comply with the due process requirements mandated by law. The twin-notice rule, requiring two written notices to the employee, was not observed by the company. The first notice should inform the employee of the specific acts or omissions for which dismissal is sought, and the second notice should inform the employee of the employer’s decision to dismiss him. The company’s failure to provide any written notice constituted a violation of Geraldo’s right to due process.

    As the Court stated, the employer must first furnish the employee with two (2) written notices: (a) notice which apprises the employee of the particular acts or omissions for which his/her dismissal is sought; and (b) subsequent notice which informs the employee of the employer’s decision to dismiss him/her. Because the company failed to comply with the substantial and procedural requirements of the law, the Court concluded that Geraldo was illegally dismissed from his employment. The Court thus sustained the award of separation pay, attorney’s fees, and other monetary claims.

    The Court clarified, however, that respondent Cando, as President of the company, could not be held personally and solidarily liable for Geraldo’s monetary claims. The Court recognized the principle that a corporation has a separate legal personality from its officers and stockholders. To pierce the corporate veil and hold a corporate officer liable, it must be shown that the corporate personality was used to perpetuate fraud or an illegal act, or that the officer acted with malice or bad faith. In this case, there was no evidence to show that Cando acted with malice or bad faith in terminating Geraldo’s employment.

    FAQs

    What was the key issue in this case? The key issue was whether a “per-piece basis” messenger should be considered a regular employee and whether his termination was legal. The Supreme Court ultimately ruled in favor of the employee, emphasizing the significance of the work’s nature and duration.
    What is a regular employee under Philippine law? A regular employee is one engaged to perform activities necessary or desirable in the usual business of the employer. This includes those who have rendered at least one year of service, even if the performance is intermittent.
    Does being paid on a “per-piece basis” mean you are not a regular employee? No, being paid on a “per-piece basis” does not automatically disqualify you from being a regular employee. The Supreme Court has clarified that the method of payment does not define the essence of the employment relationship.
    What is the twin-notice rule? The twin-notice rule requires employers to provide two written notices before terminating an employee: one informing the employee of the grounds for dismissal and another informing them of the decision to dismiss. This is a critical component of due process.
    What is abandonment of work? Abandonment of work is the deliberate and unjustified refusal of an employee to resume their employment, coupled with a clear intention to sever the employment relationship. Mere absence is not sufficient to prove abandonment.
    Who has the burden of proof in illegal dismissal cases? In illegal dismissal cases, the burden of proof rests on the employer to demonstrate that the dismissal was for a just and valid cause. This is a fundamental principle in Philippine labor law.
    Can corporate officers be held liable for illegal dismissal? Corporate officers can be held solidarily liable with the corporation for illegal dismissal if the termination was done with malice or bad faith. This requires showing that the officer assented to patently unlawful acts of the corporation.
    What is separation pay? Separation pay is a monetary benefit awarded to employees who are terminated for causes other than serious misconduct or those due to retrenchment or redundancy. It serves as a form of compensation for the loss of employment.
    What are the remedies for illegal dismissal? The remedies for illegal dismissal typically include reinstatement (or separation pay if reinstatement is not feasible), backwages, and attorney’s fees. These remedies aim to compensate the employee for the damages suffered due to the unlawful termination.

    This case underscores the importance of due process and the rights of employees, even those compensated on a per-piece basis. It serves as a reminder that the nature of the work performed and the duration of employment are key factors in determining regular employment status under Philippine law.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: REYNALDO S. GERALDO vs. THE BILL SENDER CORPORATION/MS. LOURDES NER CANDO, G.R. No. 222219, October 03, 2018

  • Regular Employee Status: Distinguishing Independent Contractors from Labor-Only Contracting in the Philippines

    The Supreme Court held that employees performing tasks essential to a company’s core business, such as distribution and sale, are considered regular employees, regardless of being contracted through an agency. This ruling protects workers from being unjustly classified as contractual, ensuring they receive the full benefits and rights afforded to regular employees under Philippine labor law. It underscores the importance of determining the true nature of the employment relationship based on the actual tasks performed rather than the contractual arrangements.

    Coca-Cola’s Drivers and Mixers: Regular Employees or Outsourced Labor?

    Valentino Lingat and Aproniano Altoveros filed a complaint against Coca-Cola Bottlers Philippines, Inc. (CCBPI), Monte Dapples Trading Corp. (MDTC), and David Lyons, alleging illegal dismissal. Lingat and Altoveros claimed they were regular employees of CCBPI, having worked for the company for several years through various agencies. CCBPI argued that MDTC, an independent contractor, employed the petitioners and that no employer-employee relationship existed between CCBPI and the petitioners. The central legal question was whether Lingat and Altoveros were regular employees of CCBPI or employees of MDTC, an independent contractor.

    The Labor Arbiter (LA) initially ruled in favor of the petitioners, declaring them illegally dismissed and ordering CCBPI to reinstate them with backwages. However, the National Labor Relations Commission (NLRC) reversed the LA’s decision, dismissing the illegal dismissal case but ordering MDTC to pay Altoveros separation pay. The Court of Appeals (CA) modified the NLRC Decision, ordering MDTC to pay separation pay to both petitioners, agreeing that MDTC was an independent contractor and the employer of the petitioners.

    The Supreme Court, however, disagreed with the Court of Appeals, emphasizing that the determination of an employer-employee relationship is a factual matter, and the conflicting findings of the lower tribunals warranted a re-evaluation of the evidence. The Court reiterated the criteria for determining regular employment under Article 295 of the Labor Code, which defines a regular employee as one engaged to perform tasks necessary or desirable in the employer’s usual business or trade or one who has been engaged for at least one year, regardless of the continuity of service.

    The Supreme Court found that Lingat, as a plant driver, and Altoveros, as a segregator/mixer of soft drinks, performed tasks directly related to CCBPI’s core business of manufacturing, distribution, and sale of beverages. The Court emphasized that these tasks were indispensable to CCBPI’s business because without them, the products would not reach the customers.

    “[Petitioners] worked within the premises of [CCBPI,] use the equipment, the facilities, cater on [its] products, [and served] the Sales Forces x x x. In other words, while at work, [petitioners] were under the direction, control and supervision of respondent Coca-Cola’s regular employees.”

    This direct connection to CCBPI’s business operations was a crucial factor in the Court’s decision.

    Moreover, the Court cited previous cases such as Coca-Cola Bottlers Philippines, Inc. v. Agito, where salesmen were deemed regular employees due to their work constituting the distribution and sale of CCBPI’s products. Similarly, in Pacquing v. Coca-Cola Philippines, Inc., sales route helpers were also considered regular employees because their tasks involved bringing CCBPI’s products to customers. These precedents strengthened the argument that Lingat and Altoveros, whose duties were similarly connected to the distribution and sale of CCBPI’s products, should also be considered regular employees.

    The Court also addressed the issue of labor-only contracting, distinguishing it from legitimate job contracting. A labor-only contractor lacks substantial capital or investment and the recruited employees perform tasks directly related to the principal business of the employer. In such cases, the principal employer is deemed the employer of the contractual employees. On the other hand, a legitimate job contractor has substantial capital and exercises control over the employees’ performance. The Omnibus Rules Implementing the Labor Code clearly differentiates between the two:

    (a) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and

    (b) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business.

    CCBPI argued that MDTC was a legitimate contractor providing warehousing management services. However, the Court found that the petitioners’ tasks were directly related to CCBPI’s distribution and sale aspects of its business, not merely warehousing. Therefore, MDTC’s role was more akin to labor-only contracting, making CCBPI the actual employer of Lingat and Altoveros.

    The Supreme Court also noted that MDTC’s substantial capital was not the sole determinant of its status as an independent contractor. As stated in Quintanar v. Coca-Cola Bottlers, Philippines, Inc., “the possession of substantial capital is only one element.” The critical factor was whether the work of the employees was directly related to the work the contractor was required to perform for the principal, which was not the case here.

    The Court concluded that Lingat and Altoveros, as regular employees, could only be dismissed for cause and with due process, which were not observed in this case. The termination based on the expiration of the Warehousing Management Agreement was not a valid cause for dismissal, and there was no evidence of due process afforded to the petitioners. Consequently, the dismissal was deemed illegal, making CCBPI and MDTC solidarily liable for the petitioners’ claims.

    Given the prolonged duration of the case, the Court deemed it more practical to award separation pay in lieu of reinstatement. The separation pay, along with attorney’s fees equivalent to 10% of the monetary award, was granted to the petitioners. Furthermore, a legal interest of 6% per annum was imposed on all monetary grants from the finality of the Decision until fully paid.

    FAQs

    What was the key issue in this case? The central issue was whether Valentino Lingat and Aproniano Altoveros were regular employees of Coca-Cola Bottlers Philippines, Inc. (CCBPI) or employees of Monte Dapples Trading Corp. (MDTC), an alleged independent contractor. The Court needed to determine the true nature of the employment relationship based on the tasks performed.
    What is a labor-only contractor? A labor-only contractor is one who does not have substantial capital or investment and whose employees perform tasks directly related to the principal business of the employer. In such cases, the principal employer is deemed the employer of the contractual employees.
    What is a legitimate job contractor? A legitimate job contractor has substantial capital or investment and exercises control over the employees’ performance. This type of contractor provides services or specific job functions to the principal employer.
    What factors determine a regular employee status? A regular employee is one engaged to perform tasks necessary or desirable in the employer’s usual business or trade or one who has been engaged for at least one year, regardless of the continuity of service. The connection between the employee’s tasks and the employer’s business is a key consideration.
    What was the basis for the Supreme Court’s decision? The Supreme Court based its decision on the fact that Lingat and Altoveros performed tasks directly related to CCBPI’s core business of manufacturing, distribution, and sale of beverages. The Court also found that MDTC was acting as a labor-only contractor, making CCBPI the actual employer.
    What is the significance of this ruling? This ruling clarifies the distinction between independent contractors and labor-only contracting arrangements, ensuring that employees performing essential tasks are recognized as regular employees. This provides them with the full benefits and rights under Philippine labor law.
    What remedies were awarded to the petitioners? The Supreme Court awarded separation pay in lieu of reinstatement, along with attorney’s fees equivalent to 10% of the monetary award. A legal interest of 6% per annum was also imposed on all monetary grants from the finality of the Decision until fully paid.
    Can a company terminate a regular employee due to the expiration of a contract with an agency? No, the expiration of a contract between a company and an agency is not a valid cause to terminate the services of a regular employee. Regular employees can only be dismissed for cause and with due process.

    This case underscores the importance of correctly classifying employees to ensure they receive the rights and benefits they are entitled to under the law. It serves as a reminder for companies to carefully evaluate the nature of their relationships with contractors and their employees to avoid potential labor disputes.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Valentino S. Lingat and Aproniano Altoveros v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 205688, July 04, 2018

  • Project Employment in Construction: Defining Scope and Tenure in the Philippines

    The Supreme Court affirmed that construction workers hired for specific projects are considered project employees, not regular employees, provided they are clearly informed of the project’s scope and duration. This means their employment lawfully ends with the project’s completion, regardless of repeated rehiring or the necessity of their work to the business.

    From Concrete Pourer to Project Employee: When Does Construction Work End?

    The case of Mario Diesta Bajaro v. Metro Stonerich Corp. (G.R. No. 227982, April 23, 2018) delves into the employment status of construction workers repeatedly hired for different projects. Mario Bajaro, a concrete pump operator, claimed he was a regular employee due to his continuous service of six years with Metro Stonerich Corporation. He argued that his work was essential to the company’s business, entitling him to security of tenure and protection against illegal dismissal when he was eventually terminated. Metro Stonerich countered that Bajaro was a project employee, hired for specific construction projects with defined durations, thus justifying the termination of his employment upon project completion. The central legal question revolves around determining whether Bajaro’s repeated hiring converted his status to that of a regular employee.

    The Labor Code of the Philippines distinguishes between various types of employment, including regular, project, seasonal, and casual. The key difference lies in the nature and duration of the work. Article 294 of the Labor Code defines a regular employee as one engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer. However, this does not apply “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 services to be performed is seasonal in nature and the employment is for the duration of the season.” This distinction is critical in determining the rights and obligations of both employer and employee.

    In project-based employment, an employee is hired for a specific project with a defined beginning and end. The Supreme Court has consistently held that the services of a project employee may be lawfully terminated upon the completion of the project or phase for which they were hired. The employer must prove two key elements to establish project-based employment: first, that the employee was hired to carry out a specific project or undertaking; and second, that the employee was notified of the duration and scope of the project. This notification is crucial to prevent employers from arbitrarily labeling employees as project-based to avoid regularization.

    The Court emphasized the unique nature of the construction industry in William Uy Construction Corp. and/or Uy, et al. v. Trinidad:

    Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if applied to the construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project.

    In Bajaro’s case, the Court found that Metro Stonerich had sufficiently demonstrated that Bajaro was hired as a concrete pump operator for five distinct construction projects. Each project had a specified duration, and Bajaro signed contracts acknowledging his status as a project employee. These contracts clearly indicated the starting and ending dates of his employment, contingent upon the completion of each project. Furthermore, Metro Stonerich complied with Department Order No. 19, Series of 1993, by submitting Establishment Employment Reports to the DOLE, indicating the termination of Bajaro’s employment due to project completion.

    Bajaro’s argument that his continuous rehiring and the essential nature of his work should have conferred regular employment status was rejected by the Court. The Court acknowledged that construction firms often hire project employees to perform work necessary and vital for their business. However, repeated rehiring does not automatically result in regularization. As highlighted in Caseres v. Universal Robina Sugar Milling Corporation, the controlling determinant is whether the employment was fixed for a specific project with its completion determined at the time of engagement.

    The Court recognized that forcing construction companies to maintain employees on a permanent basis, even without available projects, would be unduly burdensome. It would create a situation where employees are paid for work not done, which the Court deemed unfair to employers. This principle aligns with the understanding that the construction industry operates on project-based cycles, where employment opportunities fluctuate with the availability of projects.

    Despite being classified as a project employee, Bajaro was still entitled to certain benefits under the law. The Court affirmed the Labor Arbiter’s decision to award Bajaro overtime pay differentials, proportionate 13th-month pay, and service incentive leave (SIL) pay. Metro Stonerich failed to prove that it had fully compensated Bajaro for these benefits, and the burden of proof lies with the employer to demonstrate payment. The Court also awarded attorney’s fees, recognizing that Bajaro was compelled to litigate to protect his rights.

    However, Bajaro’s claims for premium pay for holiday and rest day work were denied due to a lack of factual basis. The Court noted that Bajaro failed to specify the dates he worked during special days or rest days, and the burden of proof rests on the employee to demonstrate actual service rendered on such days. It is the employers responsibilty to prove payment of salary differential, SIL, holiday pay and 13th month pay.

    FAQs

    What was the key issue in this case? The central issue was whether Mario Bajaro, a concrete pump operator, was a regular or project employee of Metro Stonerich Corp., and whether his termination was legal. The court needed to determine if his repeated rehiring converted him into a regular employee despite the nature of construction work.
    What is a project employee? A project employee is hired for a specific project or undertaking, with the duration and scope of employment determined at the time of engagement. Their employment lawfully ends upon completion of the project, as stated in the labor code.
    How does the Labor Code define regular employment? According to Article 294 of the Labor Code, a regular employee is engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer. This contrasts with project-based or seasonal employment.
    What must an employer prove to classify an employee as a project employee? The employer must prove that the employee was hired to carry out a specific project and that the employee was notified of the duration and scope of the project at the time of engagement. This prevents arbitrary classification to avoid regularization.
    Does repeated rehiring automatically make a project employee a regular employee? No, repeated rehiring does not automatically convert a project employee into a regular employee in the construction industry. The key determinant is whether the employment was fixed for a specific project with a completion date determined at the time of engagement.
    What benefits are project employees entitled to? Even as project employees, workers are entitled to benefits such as overtime pay differentials, proportionate 13th-month pay, and service incentive leave (SIL) pay, if not already fully compensated. Employers bear the burden of proving that these benefits were paid.
    Why is the construction industry treated differently regarding employment status? The construction industry is unique because companies cannot guarantee work beyond the life of each project. Construction firms depend on securing projects, which are subject to external decisions and funding, making permanent employment impractical.
    What is the significance of Department Order No. 19? Department Order No. 19 provides guidelines for employing workers in the construction industry. Compliance with this order, such as submitting Establishment Employment Reports to the DOLE, supports the claim of project employment.
    What happens if an employer fails to prove payment of benefits? If an employer fails to prove payment of benefits like overtime pay or SIL pay, the employee is entitled to receive those benefits. The burden of proof lies with the employer to demonstrate that payments were made.

    This case reinforces the principle that construction workers can be legitimately employed on a project basis, provided that the terms of employment are clearly defined and communicated. Employers must ensure transparency in hiring practices and compliance with labor laws to avoid disputes.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Mario Diesta Bajaro v. Metro Stonerich Corp., G.R. No. 227982, April 23, 2018

  • Project Employment vs. Regular Employment: Clarifying Security of Tenure in Construction

    The Supreme Court clarified that construction workers hired for specific projects are project employees, not regular employees, even with repeated rehiring. This means their employment lawfully ends with the project’s completion, impacting their rights to security of tenure and separation pay. However, employers must still comply with minimum wage laws and provide legally mandated benefits.

    Hard Hat, Short Contract? Defining Project Employment in Construction

    This case revolves around Reyman G. Minsola’s claim against New City Builders, Inc., alleging illegal dismissal and seeking regularization. Minsola argued that his continued employment as a laborer and mason for over a year, performing tasks necessary for the company’s business, transformed his status from a project employee to a regular one. The central legal question is whether Minsola’s employment was indeed project-based, and if so, whether New City properly terminated his services upon the project’s completion.

    The Labor Code distinguishes between regular and project employees. Article 294 defines regular employees as those engaged to perform activities that are usually necessary or desirable in the employer’s usual business or trade. Conversely, it defines project employees as those whose employment is fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of engagement.

    In project-based employment, the employee is assigned to a particular project or phase with a defined beginning and end. Consequently, their services may be lawfully terminated upon the project’s completion. The Supreme Court has consistently held that for employment to be considered project-based, the employer must prove that the employee was hired to carry out a specific project or undertaking, and that the employee was notified of the duration and scope of the project.

    Article 294. 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 services to be performed is seasonal in nature and the employment is for the duration of the season.

    In Minsola’s case, the court found that he was indeed hired as a project employee. New City presented evidence that Minsola was hired for specific phases of the Avida Tower 3 project—first as a laborer for the structural phase and later as a mason for the architectural phase. His employment contracts clearly stated that he was hired as a project employee and that his employment would end upon the completion of the specific phase for which he was assigned. Therefore, the Supreme Court highlighted that these contracts sufficiently informed Minsola that his tenure would only last as long as the specific phase to which he was assigned.

    Minsola argued that his continuous work and the necessity of his tasks to New City’s business made him a regular employee. However, the Supreme Court did not agree to this argument. In Gadia v. Sykes Asia, Inc., the Court clarified that projects may consist of a particular job within the regular business of the employer but distinct and separate from other undertakings. The unique nature of the construction industry was further emphasized in William Uy Construction Corp. v. Trinidad where the Supreme Court acknowledged that construction firms cannot guarantee work beyond each project’s life, and getting projects is not a matter of course.

    Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if applied to the construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project. And getting projects is not a matter of course. Construction companies have no control over the decisions and resources of project proponents or owners. There is no construction company that does not wish it has such control but the reality, understood by construction workers, is that work depended on decisions and developments over which construction companies have no say.

    In Malicdem v. Marulas Industrial Corporation, the Court took judicial notice that construction employees’ work depends on project availability, and their tenure is coterminous with the work assigned. Therefore, an employer cannot be forced to maintain employees on the payroll without projects. The Supreme Court reiterated that length of service and repeated rehiring do not automatically lead to regularization in the construction industry; thus, Minsola’s tenure did not make him a regular employee.

    Minsola also claimed constructive dismissal, alleging he was forced to sign an employment contract and termination report. The Court defined constructive dismissal as cessation of work due to continued employment being rendered impossible, unreasonable, or unlikely, such as a demotion or pay reduction. It also exists if discrimination makes employment unbearable, foreclosing any choice but to forego continued employment.

    However, the Court found no evidence that Minsola was dismissed or that his continued employment was impossible. He was not demoted, discriminated against, or prevented from returning to work. It was Minsola who stopped reporting after refusing to sign his employment record. Since he was not notified of dismissal or prevented from working, there was no illegal dismissal.

    Despite the finding that Minsola was a project employee and not illegally dismissed, the Supreme Court addressed his monetary claims. The burden of proof for payment of salary differential, service incentive leave, holiday pay and 13th month pay, the burden rests on the employer to prove payment. This is because the pertinent payrolls, records, and remittances are in the custody and control of the employer.

    Monetary Claim Burden of Proof
    Salary Differential Employer
    Service Incentive Leave Employer
    Holiday Pay Employer
    13th Month Pay Employer
    Overtime Pay Employee
    Premium Pay for Holidays and Rest Days Employee

    The Court found that Minsola’s daily wage of Php 260.00 was below the prevailing minimum wage of Php 382.00 mandated by Wage Order No. NCR-15. Thus, he was entitled to salary differentials. Additionally, New City failed to prove that Minsola’s salary included holiday pay; therefore, he was also entitled to holiday pay. Minsola was awarded salary differentials, service incentive leave pay differentials, a 13th-month pay differential, and holiday pay. Because the case involved unlawfully withheld wages, Minsola was also awarded attorney’s fees.

    FAQs

    What was the key issue in this case? The key issue was whether Reyman Minsola was a regular employee or a project employee of New City Builders, Inc., and whether he was illegally dismissed. This determined his rights to security of tenure and other benefits.
    What is the difference between a regular employee and a project employee? A regular employee performs tasks necessary for the employer’s usual business, while a project employee is hired for a specific project with a predetermined completion date. Project employees can be terminated upon the project’s completion.
    What did the court decide regarding Minsola’s employment status? The Supreme Court determined that Minsola was a project employee because he was hired for specific phases of a construction project, and his employment contracts specified the project-based nature of his work. His employment was coterminous with the projects that he was assigned to.
    Did the court find that Minsola was illegally dismissed? No, the court found no evidence of illegal dismissal. Minsola was not terminated or prevented from returning to work; he voluntarily stopped reporting after refusing to sign his employment record.
    Was Minsola entitled to any monetary claims? Yes, despite being a project employee, Minsola was entitled to salary differentials, service incentive leave pay differentials, a 13th-month pay differential, and holiday pay because his wages were below the legal minimum and the company did not prove payment of these benefits.
    What is the significance of being classified as a project employee in the construction industry? In the construction industry, project employment is common due to the temporary nature of projects. It allows companies to hire workers for the duration of specific projects without guaranteeing long-term employment.
    What should employers do to ensure proper classification of project employees? Employers should clearly specify the project-based nature of the employment in the contract, inform employees of the project’s duration, and ensure compliance with minimum wage laws and mandated benefits. This will help ensure that the employees hired are project based employees only.
    What happens if a project employee is repeatedly rehired for different projects? Repeated rehiring does not automatically convert a project employee into a regular employee in the construction industry. The key factor is whether each engagement is for a specific project with a defined end date.
    What is constructive dismissal? Constructive dismissal occurs when an employer makes continued employment unbearable, such as through demotion, discrimination, or creating hostile working conditions, forcing the employee to resign.

    This case clarifies the distinction between project and regular employment in the construction industry, highlighting the importance of clearly defining employment terms and complying with labor laws. While project-based employment is permissible, employers must still ensure fair wages and benefits are provided to their workers.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Reyman G. Minsola vs. New City Builders, Inc., G.R. No. 207613, January 31, 2018

  • Project vs. Regular Employment: Defining Worker Rights in the Philippines

    The Supreme Court has affirmed that construction workers continuously hired for projects are regular employees if the employer fails to prove the specific project and its defined duration at the time of engagement. This ruling protects workers from being indefinitely classified as project employees, ensuring they receive the rights and benefits of regular employment, including protection against illegal dismissal.

    Construction Workers’ Tenure: Were They Truly ‘Project-Based’ in Angbus Construction?

    In Isidro Quebral, et al. v. Angbus Construction, Inc. and Angelo Bustamante, the central legal question revolved around whether certain construction workers were legitimately project-based employees or, in reality, regular employees who were illegally dismissed. The workers claimed they were regular employees due to the continuous nature of their work and the necessity of their tasks to the company’s business. Conversely, the company argued that they were hired for specific projects with defined durations. This case highlights the critical distinction between project-based and regular employment, with significant implications for workers’ rights and job security in the construction industry.

    The Supreme Court’s analysis hinged on the proper interpretation and application of Article 295 of the Labor Code, which defines regular and casual employment. According to this article, an employment is deemed regular when the employee performs activities necessary or desirable to the employer’s usual business, except when the employment is fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the employee’s engagement.

    Art. 295 [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 services to be performed is seasonal in nature and the employment is for the duration of the season.

    The Court emphasized that employers claiming project-based employment must prove two key requisites: (1) the employees were assigned to a specific project, and (2) the duration and scope of the project were specified at the time of engagement. In this case, Angbus Construction failed to provide sufficient evidence to meet these requirements. The absence of employment contracts detailing the specific projects and their durations raised serious doubts about whether the workers were adequately informed of their status as project employees at the start of their employment.

    Building on this principle, the Court addressed the admissibility and weight of evidence presented by both parties. Angbus Construction attempted to justify the non-submission of employment contracts by presenting a Barangay Rosario Certification, claiming that the documents were destroyed by a flood. However, the NLRC and the Supreme Court gave little weight to this certification, noting that the company’s main office was located in Quezon City, not Rosario, Pasig City, where the alleged flood occurred. The Court highlighted that employment records should be kept at the main or branch office, not at a temporary project site.

    Furthermore, the Court examined the Department of Labor and Employment (DOLE) Reports submitted by Angbus, which indicated that the workers’ termination was due to project completion. While such reports can be considered an indicator of project employment, the Court clarified that they are not conclusive, especially when other evidence suggests otherwise. In this case, the lack of proof that the workers were informed of the specific project and its duration undermined the credibility of the DOLE Reports as evidence of legitimate project-based employment.

    The Supreme Court also addressed the procedural issue of the timeliness of the workers’ appeal to the NLRC. The Court of Appeals (CA) had ruled that the appeal was filed out of time, discounting the registry receipt and a certification from a former postmaster as insufficient proof of timely filing. However, the Supreme Court disagreed, holding that the registry receipt, the date stamped on the envelope, and the postmaster’s certification collectively provided substantial evidence that the appeal was indeed filed within the prescribed period. This aspect of the decision underscores the importance of proper documentation and the Court’s willingness to consider various forms of evidence to ensure fair adjudication of labor disputes.

    The implications of this ruling are significant for both employers and employees in the construction industry. It clarifies the burden of proof on employers to demonstrate that workers are genuinely employed on a project basis, with clear communication of the project’s scope and duration. Failure to meet this burden can result in workers being deemed regular employees, entitled to greater job security and benefits. This decision also serves as a reminder to employers to maintain accurate and accessible employment records, as the absence of such records can weaken their defense against claims of illegal dismissal.

    This approach contrasts with the CA’s interpretation, which placed undue emphasis on the DOLE reports and accepted the Barangay Rosario Certification as a valid excuse for the absence of employment contracts. The Supreme Court’s decision reinforces the principle that labor laws are to be interpreted in favor of labor, ensuring that workers’ rights are protected against arbitrary or unfair employment practices. The ruling also highlights the importance of procedural compliance, as the Court carefully scrutinized the evidence related to the timeliness of the workers’ appeal to ensure that they were not unjustly denied their right to seek redress.

    Ultimately, the Supreme Court’s decision in Quebral v. Angbus Construction affirms the principle that continuous employment in tasks essential to a company’s business indicates regular employment, unless proven otherwise with clear, documented evidence of a specific project with defined duration. The decision emphasizes that employers must adhere to the requirements of the Labor Code and provide transparent communication to employees regarding their employment status, project assignments, and durations to avoid potential disputes and ensure compliance with labor laws.

    FAQs

    What was the key issue in this case? The central issue was whether construction workers were legitimately project-based employees or regular employees who were illegally dismissed. The court examined if the employer proved the specific project and its duration.
    What is the difference between a project employee and a regular employee? A project employee is hired for a specific project with a defined duration, while a regular employee performs tasks necessary or desirable to the employer’s usual business. Regular employees have greater job security and benefits.
    What evidence did the employer fail to provide in this case? The employer failed to provide employment contracts detailing the specific projects assigned to the workers and their durations. They also failed to adequately explain why these records were unavailable.
    What is the significance of the DOLE reports in this case? While DOLE reports indicating project completion can be an indicator of project employment, the Court clarified that they are not conclusive proof. Other evidence must support the claim of project-based employment.
    Why was the Barangay Rosario Certification not given much weight? The certification stated that the documents were destroyed by a flood, but the company’s main office was not located in the barangay of the flood. The Court emphasized that employment records should be kept at the main or branch office.
    What did the Court say about the timeliness of the workers’ appeal? The Court held that the appeal was timely filed, based on the registry receipt, the date stamped on the envelope, and the postmaster’s certification. This demonstrated substantial evidence of timely filing.
    What is the burden of proof for employers claiming project-based employment? Employers must prove that the employees were assigned to a specific project and that the duration and scope of the project were specified at the time of engagement. This includes clear communication to employees.
    What is the practical implication of this ruling for construction workers? Construction workers continuously hired for projects are likely to be considered regular employees if the employer fails to prove the project’s specific and defined duration, giving workers more rights.
    What happens if an employer fails to prove project-based employment? If an employer fails to prove project-based employment, the workers are deemed regular employees and are entitled to greater job security, benefits, and protection against illegal dismissal.

    This landmark decision reinforces the importance of proper documentation and communication in employment relationships, particularly in the construction industry. Employers must ensure transparency and compliance with labor laws to avoid disputes and protect the rights of their workers.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Isidro Quebral, et al. v. Angbus Construction, Inc., G.R. No. 221897, November 7, 2016

  • Project vs. Regular Employment: Understanding Security of Tenure in the Philippines

    In Felipe v. Danilo Divina Tamayo Konstract, Inc., the Supreme Court affirmed that employees hired for specific projects are not entitled to the same security of tenure as regular employees. This means project-based workers can be terminated upon project completion without it being considered illegal dismissal. The ruling emphasizes the importance of clearly defined employment contracts that specify the project’s scope and duration, protecting employers who engage workers for particular, time-bound tasks. It impacts construction workers and others in project-based industries, clarifying their rights and the conditions under which their employment can be terminated. This decision reinforces the principle that project employees’ services are tied directly to the project’s lifespan.

    Navigating Employment Boundaries: Project Completion vs. Illegal Dismissal

    The case revolves around Marvin G. Felipe and Reynante L. Velasco, who claimed they were illegally dismissed by Danilo Divina Tamayo Konstract, Inc. (DDTKI). Felipe and Velasco argued that despite being initially hired as project employees, their continuous service and the nature of their work rendered them regular employees, thus entitling them to security of tenure. They filed a complaint for illegal dismissal when they were not given new assignments after their last project, alleging that they were not properly informed about their employment status. DDTKI, however, contended that Felipe and Velasco were hired for specific projects with clearly defined durations, and their employment was terminated upon the completion of those projects.

    The central legal question is whether Felipe and Velasco were project employees or regular employees. Article 280 of the Labor Code distinguishes between regular and project employment. Regular employees perform tasks that are usually necessary or desirable in the employer’s usual business, whereas project employees are hired for a specific project or undertaking, the completion or termination of which has been determined at the time of the employee’s engagement. The distinction is crucial because regular employees can only be dismissed for just or authorized causes, while project employees’ services may be lawfully terminated upon project completion.

    The Labor Arbiter (LA), the National Labor Relations Commission (NLRC), and the Court of Appeals (CA) all agreed that Felipe and Velasco were project employees. The LA’s decision emphasized that the employment contracts specifically mentioned the duration of the contract for a specific client, with a provision indicating that the period served as notice for termination upon project completion. The NLRC affirmed this ruling, modifying it only to include proportionate 13th-month pay. The CA upheld the NLRC’s decision, stating that the length of service and continuous rehiring did not automatically grant regular status.

    The Supreme Court (SC) reiterated that factual findings of quasi-judicial bodies like the NLRC are generally respected, especially when they align with those of the LA and are affirmed by the CA. The Court emphasized that it typically only entertains questions of law in a petition for review on certiorari. Here, the consistent finding that Felipe and Velasco were project employees was supported by substantial evidence, primarily their employment contracts, leading the Court to uphold the lower courts’ decisions. The SC cited Article 280 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 services to be performed is seasonal in nature and the employment is for the duration of the season.

    The Court emphasized that the principal test for determining whether employees are project 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 of engagement. The project can be either within the regular business of the employer but distinct from other undertakings, or it can be a job not within the regular business of the corporation. In this case, the consistent findings of the LA, NLRC, and CA supported the conclusion that Felipe and Velasco were hired for a specific task within a predetermined period, as evidenced by their employment contracts.

    Furthermore, the Supreme Court addressed the petitioners’ argument that their continuous service for four years and the frequent renewal of their employment contracts should have conferred regular employee status. The Court cited Aro v. NLRC to clarify that the length of service or rehiring on a project-to-project basis does not automatically confer regular employment status. The re-hiring of experienced construction workers is a natural consequence of their skills and expertise. Therefore, the petitioners’ termination upon completion of the US Embassy New Office Annex 1 Project (MNOX-1) was deemed valid.

    What is the key difference between a project employee and a regular employee? A project employee is hired for a specific project with a predetermined duration, while a regular employee performs tasks necessary or desirable in the employer’s usual business. The employment of a project employee ends upon the completion of the project.
    What happens to a project employee when the project is completed? The services of a project employee may be lawfully terminated upon the completion of the project for which they were hired, without it being considered illegal dismissal. This is a key distinction from regular employees who have greater job security.
    Does continuous service automatically make a project employee a regular employee? No, the length of service or the re-hiring of construction workers on a project-to-project basis does not automatically confer regular employment status. The nature of the employment remains project-based if the initial terms of employment specify a particular project.
    What is the main test for determining if an employee is a project employee? The principal test is whether the employee is assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time of engagement. This determination is made at the start of employment.
    What did the Court consider in determining the employees’ status in this case? The Court considered the employment contracts, which specifically mentioned the duration of the contract for a specific client and included a provision indicating that the period served as notice for termination upon project completion. These factors supported the project employee status.
    Were the employees entitled to service incentive leave pay? No, the Court ruled that the petitioners were not entitled to service incentive leave pay because they had not rendered at least one year of continuous service, a requirement for this benefit. The employees needed to meet the minimum tenure requirement.
    What was the final decision of the Supreme Court? The Supreme Court denied the petition, affirming the Court of Appeals’ decision that the employees were project employees and were not illegally dismissed upon the completion of their project. The employees were therefore not entitled to reinstatement or back wages.
    Why is it important to distinguish between project and regular employment? The distinction is important because it affects an employee’s rights, particularly their security of tenure. Regular employees have greater protection against dismissal, while project employees’ employment is tied to the completion of a specific project.

    This case clarifies the rights and obligations of employers and employees in project-based industries in the Philippines. Understanding the distinction between project and regular employment is crucial for both employers and employees to ensure compliance with labor laws. The emphasis on clear and specific employment contracts serves to protect the interests of both parties, preventing potential disputes over employment status and termination.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: MARVIN G. FELIPE and REYNANTE L. VELASCO, PETITIONERS, VS. DANILO DIVINA TAMAYO KONSTRACT, INC. (DDTKI) AND/OR DANILO DIVINA TAMAYO, PRESIDENT/OWNER, RESPONDENTS, G.R. No. 218009, September 21, 2016