Case Digest: Dacuital v. L.M. Camus Engineering Corp. and Camus

G.R. NO. 176748: September 1, 2010

JUDY O. DACUITAL, et. al., Petitioners, v. L.M. CAMUS ENGINEERING CORPORATION and/or LUIS M. CAMUS,Respondents



Petitioners (LMCEC Employees) filed a complaint for illegal dismissal and non-payment of monetary benefits against respondent LM Camus Engineering Corp. before the National Labor Relations Commission (NLRC). The employees alleged that they were illegally dismissed from employment and that their employer failed to pay them their holiday pay, premium pay for holiday, rest day, service incentive leave pay, and 13th month pay during the existence and duration of their employment. They also averred that they were not provided with sick and vacation leaves.

Respondents denied that petitioners were illegally dismissed from employment. They claimed that petitioners were project employees and, upon the completion of each project, they were served notices of project completion. They clarified that the termination of petitioners’ employment was due to the completion of the projects for which they were hired.

Petitioners, however, countered that they were regular employees as they had been engaged to perform activities which are usually necessary or desirable in the usual business or trade of LMCEC. They denied that they were project or contractual employees because their employment was continuous and uninterrupted for more than one (1) year. Finally, they maintained that they were part of a work pool from which LMCEC drew its workers for its various projects.

The Labor Arbiter rendered a decision declaring the dismissal of the complainant-employees as illegal and the complainants are entitled to reinstatement without back wages. The NLRC modified the decision of the Labor Arbiter and ordered the reinstatement of the complainants with limited backwages. The respondents appealed the decision to the Court of Appeals and the appellate court held that the complainants are project employees and hence, there was no illegal dismissal.

ISSUE: Whether or not the Court of Appeals is correct in concluding that the petitioners are project employees and that their dismissal from employment was legal

LABOR LAW: Principal test used to determine whether employees are project employees or regular employees


The Supreme Court, speaking through Justice Nachura, answered in the negative. Article 280 of the Labor Code distinguishes a "project employee" from a "regular employee" in this wise:

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.

The principal test used to determine whether employees are project employees is whether or not the employees were assigned to carry out a specific project or undertaking, the duration or scope of which was specified at the time the employees were engaged for that project.

Even though the absence of a written contract does not by itself grant regular status to petitioners, such a contract is evidence that petitioners were informed of the duration and scope of their work and their status as project employees.In this case, where no other evidence was offered, the absence of the employment contracts raises a serious question of whether the employees were properly informed at the onset of their employment of their status as project employees.

While it is true that respondents presented the employment contract of Dacuital, the contract does not show that he was informed of the nature, as well as the duration of his employment. In fact, the duration of the project for which he was allegedly hired was not specified in the contract.

Hence, the dismissal of the petitioners is declared illegal.