CASE DIGEST: Malicdem v. Marulas Industrial

G.R. No. 204406, February 26, 2014




Petitioners Malicdem and Flores were hired by respondent corporation as extruder operators in 2006 They were responsible for the bagging of filament yarn, the quality of pp yarn package and the cleanliness of the work place area. Their employment contracts were for a period of one (1) year. Every year thereafter, they would sign a Resignation/Quitclaim in favor of Marulas a day after their contracts ended, and then sign another contract for one (1) year until such time that they were told not to report to work anymore. They were asked to sign a paper acknowledging the completion of their contractual status. Claiming that they were illegally dismissed, the corporation countered that their contracts showed that they were fixedterm employees for a specific undertaking which was to work on a particular order of a customer for a specific period. Their severance from employment then was due to the expiration of their contracts.

ISSUE: Whether or not petitioners were illegally dismissed

HELD: Yes. CA affirming NLRC decision annulled and set aside

Labor Law: Effect of continuous re-hiring of a project employee for the same tasks that are vital, necessary and indispensable to the usual trade or business of the employer
Once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence. To rule otherwise would allow circumvention of labor laws in industries not falling within the ambit of Policy Instruction No. 20/Department Order No. 19, hence allowing the prevention of acquisition of tenurial security by project or work pool employees who have already gained the status of regular employees by the employers conduct.

The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business.

It is clear then that there was deliberate intent on the part of the employer to prevent the regularization of petitioners. To begin with, there is no actual project. The only stipulations in the contracts were the dates of their effectivity, the duties and responsibilities of the petitioners as extruder operators, the rights and obligations of the parties, and the petitioners compensation and allowances. As there was no specific project or undertaking to speak of, the respondents cannot invoke the exception in Article 280 of the Labor Code.This is a clear attempt to frustrate the regularization of the petitioners and to circumvent the law.

Even granting that petitioners were project employees, they can still be considered as regular as they were continuously hired by the same employer for the same position as extruder operators. Being responsible for the operation of machines that produced sacks, their work was vital and indispensable the business of the employer.

The respondents cannot use the alleged expiration of the employment contracts of the petitioners as a shield of their illegal acts. The project employment contracts that the petitioners were made to sign every year since the start of their employment were only a stratagem to violate their security of tenure in the company.

The respondents invocation ofWilliam Uy Construction Corp. v. Trinidadis misplaced because it is applicable only in cases involving the tenure of project employees in the construction industry. It is widely known that in the construction industry, a project employees work depends on the availability of projects, necessarily the duration of his employment. It is not permanent but coterminous with the work to which he is assigned.It would be extremely burdensome for the employer, who depends on the availability of projects, to carry him as a permanent employee and pay him wages even if there are no projects for him to work on.The rationale behind this is that once the project is completed it would be unjust to require the employer to maintain these employees in their payroll.

Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.


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