ASSOCIATION OF TRADE UNIONS (ATU), RODOLFO MONTECLARO AND EDGAR JUESAN, PETITIONERS, VS. HON. COMISSIONERS OSCAR N. ABELLA, MUSIB N. BUAT, LEON GONZAGA JR., ALGON ENGINEERING CO…

Association of Trade Unions versus Algon Engineering

The Case

This is a labor case about the boundary between a project employee and a regular employee. The Association of Trade Unions, together with Rodolfo Monteclaro and Edgar Juesan, asks the Supreme Court to reverse the National Labor Relations Commission, which had modified the labor arbiter's ruling in favor of the workers. Algon Engineering, a domestic corporation engaged in government road construction projects, is the employer. The workers claim they were illegally dismissed because of their union activities; the company answers that their contracts simply ended when the projects they were hired for were completed. The case matters because it tells us when the completion of a project lawfully ends employment, and because it reminds us that a petition for certiorari under Rule 65 must first pass through a motion for reconsideration.

Procedural History

The workers first filed individual complaints for illegal dismissal, unfair labor practice, underpayment of wages, thirteenth month pay, holiday pay and overtime pay, with a claim for reinstatement and back wages, before the Regional Arbitration Branch of the National Labor Relations Commission. The cases were consolidated and assigned to Labor Arbiter Nicolas Sayon. He declined to resolve the money claims because a similar matter was pending before the regional office of the labor department, found no unfair labor practice, but declared the dismissal of five workers illegal and ordered their reinstatement with back wages, while dismissing the complaints of the rest for lack of merit. Both sides appealed to the National Labor Relations Commission. Pending appeal, three workers filed sworn affidavits of desistance and motions to withdraw, which were granted. The Commission then issued its resolution modifying the labor arbiter, awarding monetary benefits to qualified workers but dismissing the illegal dismissal complaints of the others. The union and the workers came to the Supreme Court by a special civil action for certiorari under Rule 65, without first filing a motion for reconsideration.

Facts

From 1968 to 1989, Algon Engineering engaged the services of a number of workers — mechanics, painters, drivers, welders, carpenters and others — on various government construction projects on different dates. Their contracts indicated the particular project to which each was assigned, the duration of the employment, and the daily wage. In February 1989, the workers joined the union, which then filed a petition for certification election. The company opposed it, saying the workers were project employees and could not form part of the rank and file bargaining unit. The Med-Arbiter dismissed the petition, but the Secretary of Labor and Employment reversed and ordered a certification election.

Meanwhile, the union demanded payment of wage differentials, and when the demand was unheeded, the union and the workers filed a complaint for wage differentials and other benefits. Shortly thereafter, the company terminated the workers' employment, citing the completion of its projects or the expiration of their contracts. The workers, however, claimed they were dismissed because of their union activities, and on May 17, 1989 they staged a strike. On the company's complaint, Labor Arbiter Newton Sancho declared the strike illegal and held that five workers who participated had lost their employment status; the Commission affirmed, and this Court dismissed the union's petition for certiorari.

The aggrieved workers then filed their individual complaints, which reached Labor Arbiter Sayon and, on appeal, the National Labor Relations Commission. The Commission modified the labor arbiter's decision, and it is that resolution which the union and the workers now challenge.

Issues

• Whether or not the petition for certiorari under Rule 65 may be entertained despite the petitioners' failure to first file a motion for reconsideration of the assailed resolution.
• Whether or not the National Labor Relations Commission committed grave abuse of discretion in dismissing the illegal dismissal complaints of the workers.
• Whether or not the petitioners were regular employees rather than project employees of the respondent company.

Applicable Provisions

Article 280 of the Labor Code, as quoted in the decision, defines regular and casual employment:

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 services to be performed is seasonal in nature and the employment is for the duration of the season. And employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

This is the very provision that supplies the test the Court applies: the exception for a specific project or undertaking is what makes a worker a project employee.

Policy Instruction No. 20, in force during the period of the petitioners' employment, provides:

Project employees are those employed in connection with a particular construction project. Non-project (regular) employees are those employed by a construction company without reference to any particular project. Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in connection with such termination. What is required of the company is report to the nearest Public Employment Office for statistical purposes.

This instruction tells us that a project employee's termination upon completion of the project is lawful and does not carry termination pay, and that the employer's only duty is to report the termination for statistical purposes.

Ruling

On the first issue, the Court held that the petition must fail for procedural reasons. A motion for reconsideration is indispensable; it gives the Commission a chance to correct its own errors before the courts are asked to intervene. Certiorari lies only when there is no appeal or other plain, speedy and adequate remedy, and here the plain remedy was a motion for reconsideration filed under oath within ten days from receipt of the resolution, a procedure the Court described as jurisdictional. Without such a motion seasonably filed, the resolution becomes final and executory after ten calendar days. The Court also noted that the petitioners neither assailed the Commission's jurisdiction nor attributed grave abuse of discretion to it, and these — not mere reversible error — are the proper grounds under Rule 65.

On the second and third issues, the Court nevertheless examined the merits and held that the petitioners were project employees, not regular employees. Their contracts attested that they were hired for specific projects, that their employment was coterminous with the completion of the project, and that their tenure would depend on the duration of any phase of the project or the completion of the awarded government construction projects. They were informed in advance that the project would end on a stated or determinable date. The company also regularly submitted reports of termination of services of project workers to the regional office of the labor department, as Policy Instruction No. 20 requires, and this compliance confirmed their status. Since they were project employees whose employment was fixed for a specific undertaking, their employment legally ended upon completion of the project, and the termination could not be regarded as illegal dismissal.

Doctrine

First, a petition for certiorari under Rule 65 against a resolution of the National Labor Relations Commission must be preceded by a timely motion for reconsideration; absent that motion, the resolution becomes final and executory, and the petition is dismissible. Second, under Article 280 of the Labor Code, an employee is a project employee when the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement. The hallmarks are a contract naming the particular project, advance notice of the determinate date of termination, and the employer's report of termination to the public employment office. Such an employee's separation upon completion of the project is lawful and is not illegal dismissal.

Disposition

The petition was dismissed and the assailed resolution of the National Labor Relations Commission was affirmed, with no pronouncement as to costs; the company prevailed.

Remember This

Memorize this line: a project employee's contract ends with the project, and that ending is not illegal dismissal. Examiners use this case to test the project versus regular employee distinction under Article 280, and the indispensable motion for reconsideration before any Rule 65 petition against the labor tribunal.