MARIA CECILIA P. LICUDINE, RACHEL B. GADOR, RIZZA A. CANILLO, HELEN B. SULPICIO, ANALYN G. LAZARAGA, NANCY G. DESIERTO, ROSALIE R. EULALIO, ANAFEL C. YEE, DELIA T. ADE, DAISY C.…

Licudine versus Dole Philippines

The Case

This is a labor case in which a group of workers led by Maria Cecilia Licudine sued Dole Philippines, their former employer, after their services were ended on the ground that the projects to which they had been assigned were already completed. The workers claimed they were illegally dismissed and that they had in fact become regular employees. The case matters because it shows how the Supreme Court tests a claim of project employment: the employer must specify, at the time of engagement, not merely the period of employment but the duration or scope of the particular project, and must prove that the project was actually completed.

Procedural History

The workers brought their complaint for illegal dismissal against Dole Philippines. The labor arbiter ruled in their favor, and the National Labor Relations Commission reversed on appeal, issuing resolutions dated October 29, 2010 and January 28, 2011. The workers then went up to the Supreme Court on a petition for review. On February 27, 2014, the Supreme Court rendered a Decision granting the petition and setting aside the two resolutions of the National Labor Relations Commission. Dole Philippines moved to reconsider that Decision, insisting that the workers were project employees whose contracts had simply expired and that there was therefore no illegal dismissal and no basis for nominal damages or attorney's fees. The Court denied the motion for reconsideration, and it is that denial, with its restated reasoning, that we study here.

Facts

The workers were engaged by Dole Philippines as general utility personnel. They signed contracts that Dole described as contracts for project employment, and Dole maintained that before they began work the workers were made to understand that their work was temporary in nature. Dole also claimed that the projects to which they were assigned were non-core projects, temporary in character, and separate from its usual business of producing and marketing fresh fruits, fresh vegetables and fresh-cut flowers, with a growing line of quality packaged foods.

In truth, the contracts specified the period of employment but did not specify the duration or scope of the particular project for which each worker was hired. The beginning and end of the supposed projects were not determined, nor were they determinable at the time of engagement. The workers were repeatedly and continuously re-hired, for periods ranging from three years to eight years, and they performed functions that were necessary and desirable in Dole's business.

When Dole ended their services, it said this was due to the completion or cessation of the specific projects to which they had been assigned. The workers countered that the activities to which they had been engaged were still subsisting and in fact expanding, and that they had simply been replaced by workers supplied by CAMPCO. Dole never disputed that claim. Dole also failed to show that its so-called non-core projects were distinct, separate and identifiable from its usual business, and it served no notice of dismissal on the workers or on the Department of Labor and Employment.

Issues

• Whether or not the workers were project employees whose employment lawfully ended upon completion of their projects.
• Whether or not the workers attained regular status by reason of their repeated and continuous re-hiring.
• Whether or not the workers were illegally dismissed.
• Whether or not the workers are entitled to nominal damages and attorney's fees.

Applicable Provisions

Article 283 of the Labor Code, as cited in the Decision, provides:

Article 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one month before the intended date thereof.

This provision bears on the case because the Court held Dole liable for nominal damages for having dismissed the workers without serving the required one-month written notice on them and on the Department of Labor and Employment.

Ruling

On the first issue, the Court held that the workers were not validly project employees. Scrutinizing the contracts, the Court found that what was specified was the period of employment, not the duration or scope of the project. The Court reasoned that the workers were assigned to a purported project the beginning and end of which were not determined nor specified at determinable times, and that Dole failed to show that its non-core projects were distinct, separate and identifiable from its usual business.

On the second issue, the Court held that the workers attained regular status. Length of time is not the controlling test for project employment, but it is vital in determining whether the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business of the employer. Having been repeatedly and continuously re-hired for three to eight years as general utility personnel performing functions necessary and desirable in Dole's business, the workers ceased to be project employees and became regular employees.

On the third issue, the Court held that the workers were illegally dismissed. It is incumbent upon the employer to prove by the quantum of evidence required by law that the dismissal of an employee is not illegal, otherwise the dismissal would be unjustified. Dole failed to discharge this burden: it offered only bare allegations of project completion, and bare allegation is not proof. Its claim was further weakened because the workers' assertion that the activities were still subsisting and expanding, and that they were replaced by workers supplied by CAMPCO, remained undisputed.

On the fourth issue, the Court held that the dismissal, having been effected without just or authorized cause and without complying with the requirements of due process, entitled the workers to nominal damages and attorney's fees. Attorney's fees are awarded in labor cases specifically in actions for recovery of wages or where an employee was forced to litigate and thus incurred expenses to protect his rights and interest.

Doctrine

For a valid project employment, the employer must specify at the time of engagement not only the period of employment but the duration or scope of the specific project, and the beginning and end of the project must be determined or determinable. A worker initially hired as a project or fixed-term employee attains regular status when repeatedly and continuously re-hired over a long period to perform functions necessary and desirable in the employer's usual business. The employer bears the burden of proving with substantial evidence that the dismissal is not illegal, and bare allegation of project completion is not proof. Dismissal without just or authorized cause and without the one-month written notice required by Article 283 of the Labor Code entitles the worker to nominal damages and attorney's fees.

Disposition

The Court denied Dole Philippines' motion for reconsideration, thereby sustaining its earlier Decision that set aside the resolutions of the National Labor Relations Commission and held the workers illegally dismissed, with nominal damages and attorney's fees in their favor.

Remember This

The line to memorize is that what the contract must specify is the duration or scope of the project, not merely the period of employment, and that repeated re-hiring for work necessary and desirable to the business confers regular status. Examiners use this case to test project employment against regular employment, the employer's burden of proof in dismissal cases, and the award of nominal damages for failure to comply with Article 283 of the Labor Code.