D.M. Consunji Corporation vs. Rogelio P. Bello

An employer invoking voluntary resignation as a defense in an illegal dismissal case must prove by clear, positive and convincing evidence that the resignation was voluntary, and cannot rely on the weakness of the employee's evidence; a project employee repeatedly rehired to perform work necessary and desirable to the employer's business acquires regular employment status.

D.M. Consunji Corporation (DMCI) is a construction company; Rogelio P. Bello was engaged by DMCI as a mason in its construction projects under project employment contracts and appointment papers. The governing framework included Article 280 of the Labor Code, which distinguishes regular employment from project employment, and Policy Instruction No. 20, as revised by Department Order No. 19, series of 1993, which required project employers to report project terminations to the Department of Labor and Employment.

Bello brought a complaint for illegal dismissal and damages against DMCI and/or Rachel Consunji. In his position paper, he claimed that DMCI had employed him as a mason without interruption from February 1, 1990 until October 10, 1997 at an hourly rate of ₱25.081; that he had been diligent and devoted and had never violated company rules; and that his job as a mason was necessary and desirable in DMCI's usual business or trade. He alleged that he had been diagnosed with pulmonary tuberculosis and had taken a leave of absence; that upon recovery he reported back to work, but DMCI refused to accept him and instead handed him a termination paper; and that he had been terminated due to "RSD" effective November 5, 1997. He stated that he did not know the meaning of "RSD," that the cause was not explained to him, that he was not given prior notice, and that he was not paid separation pay. He further claimed that DMCI's projects had not yet been completed at the time of his dismissal and that, even if he had been terminated for an authorized cause, he should have received at least one month pay or at least one-half month pay for every year of service, whichever was higher.

DMCI contended that Bello had only been a project employee, as borne out by his contract of employment and appointment papers. It maintained that after his termination it had complied with the reportorial requirements of the Department of Labor and Employment under Policy Instruction No. 20, as revised by Department Order No. 19, series of 1993. Although Bello's last project employment contract had been set to expire on October 7, 1997, DMCI asserted that he had tendered his voluntary resignation on October 4, 1997 for health reasons that rendered him incapable of performing his job, as shown by his resignation letter.

The record tabulated Bello's project engagements from SM Megamall in February 1990 through ICEC in October 1997, including assignments at JMT, Renaissance, Bayview, Golden Bay I, Golden Bay II, and ADC. The tabulation listed both the stated contract durations and the actual termination dates, which in several instances fell after the stated contract periods.

Bello denied having resigned. He explained that he had signed the letter because DMCI had made him believe that it was for the purpose of extending his sick leave. ELA Panganiban-Ortiguerra found that the handwriting in the supposed resignation letter was "undeniably different" from Bello's and that DMCI had not rebutted this observation; she credited Bello's claim. The CA found that Bello had been employed as a mason continuously from February 1, 1990 to October 5, 1997 and had been repeatedly rehired, with a continuing need for his services over a long span of time.

• Project Employment: DMCI contended that Bello was only a project employee, as borne out by his contract of employment and appointment papers; his last project employment contract was set to expire on October 7, 1997.
• Compliance with DOLE Reportorial Requirements: DMCI maintained that it had complied with the reportorial requirements of the DOLE under Policy Instruction No. 20, as revised by Department Order No. 19, series of 1993.
• Voluntary Resignation: DMCI claimed that Bello tendered his voluntary resignation on October 4, 1997 for health reasons that rendered him incapable of performing his job, as shown by his resignation letter.
• Grave Abuse of Discretion: On appeal to the NLRC, DMCI argued that the labor arbiter gravely abused her discretion in holding Bello a regular employee contrary to law, evidence, and jurisprudence, and in declaring the termination illegal despite his voluntary resignation.
• Necessary Only for Project Period: Before the Supreme Court, DMCI contended that Bello's services as a mason were deemed necessary and desirable in its usual business only for the period it took to complete the project.

• Regular Employment and Illegal Dismissal: Bello claimed that DMCI employed him as a mason without interruption from February 1, 1990 until October 10, 1997 at an hourly rate of ₱25.081; he was diligent and devoted, had no complaints or violations, and his job was necessary and desirable to DMCI's business.
• Termination Due to "RSD": He was diagnosed with pulmonary tuberculosis and took a leave of absence; upon recovery, he reported for work, but DMCI refused to accept him and handed him a termination paper stating "RSD" effective November 5, 1997, whose meaning was not explained to him.
• Lack of Notice and Separation Pay: Bello argued that he was not given prior notice of termination and was not paid separation pay; at the time of dismissal, DMCI's projects had not yet been completed; even if terminated for an authorized cause, he should have received at least one month pay or at least one-half month pay for every year of service, whichever was higher.
• Denial of Resignation: Bello denied having resigned, explaining that he had signed the letter because DMCI made him believe it was for the purpose of extending his sick leave.
• Grave Abuse of Discretion by NLRC: In his CA petition, Bello averred that the NLRC committed grave abuse of discretion amounting to lack of jurisdiction in upholding DMCI's appeal, setting aside the ELA decision, dismissing his complaint, and denying his motion for reconsideration.

• Regular Employment: Whether Bello was a regular employee.
• Dismissal or Voluntary Resignation: Whether Bello was dismissed or voluntarily resigned.

• Regular Employment: Yes. Bello acquired regular employment status. His work as a mason was necessary and desirable to DMCI's construction business, and his repeated rehiring and continuous service over eight years removed him from the scope of project employment under Article 280 of the Labor Code.
• Dismissal or Voluntary Resignation: Dismissed; the resignation was not voluntary. DMCI, as the employer interposing voluntary resignation, failed to prove it by clear, positive and convincing evidence and could not rely on the weakness of Bello's evidence.

• Regular Employment: Article 280 of the Labor Code governs. A project employee is one hired for a specific project or undertaking, and the completion or termination of such project or undertaking has been determined at the time of engagement. Bello was initially a project employee because the project employment contract gave notice at the time of engagement that his employment was for a specific project or phase of work, including its duration and determinable completion date. However, the history of his appointment and employment showed that he performed tasks as a mason in DMCI's various construction projects. The work of a mason was related to building or constructing and was undoubtedly necessary and desirable to the business or trade of one engaged in the construction industry like DMCI. His being hired as a mason in not one but several projects revealed his necessity and desirability to DMCI's construction business. It is settled that the extension of the employment of a project employee long after the supposed project has been completed removes the employee from the scope of a project employee and makes him a regular employee. The length of time of the employee's service, while not a controlling determinant of project employment, is a strong factor in determining whether he was hired for a specific undertaking or in fact tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. DMCI's categorization of Bello's employment status was not decisive; what were of consequence were his actual functions and the length of his stay with DMCI. The principal test for determining whether an employee is a project employee, as distinguished from a regular employee, is whether he is assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time he is engaged for the project. DMCI's contention that Bello's services as a mason were necessary and desirable only for the period it took to complete the project may be correct if each engagement over the span of eight years was treated separately. The contention cannot be upheld, however, because his successive reengagement to perform the same kind of work as a mason firmly manifested the necessity and desirability of his work in DMCI's usual business of construction. The CA's conclusion that Bello acquired the status of a regular employee was therefore affirmed.
• Dismissal or Voluntary Resignation: DMCI claimed that Bello voluntarily resigned and presented his supposed handwritten resignation letter. Bello denied having resigned, explaining that he had signed the letter because DMCI had made him believe that it was for the purpose of extending his sick leave. In resolving the matter against DMCI, the CA relied on the conclusion by ELA Panganiban-Ortiguerra that she could not give credence to the voluntary resignation for health reasons in the face of Bello's declaration and on her observation that the handwriting in the supposed resignation letter was "undeniably different from that of complainant," something that DMCI had not rebutted. The CA's reliance on the ELA's conclusion and finding was warranted. Her observation could not be ignored or shunted aside simply because she had no expertise to make such a determination, as the NLRC tersely stated; her supposed lack of expertise did not appear in the records, rendering the NLRC's statement speculative and whimsical. To discount her competence to make that observation would disturb the time-honored practice of according respect to the findings of the first-line trier of facts in order to prefer the speculative and whimsical statement of an appellate forum like the NLRC. Even had the letter been actually signed by Bello, the voluntariness of the resignation could not be assumed from such fact alone. His claim that he had been led to believe that the letter would serve only as the means of extending his sick leave should have alerted DMCI to the task of proving the voluntariness of the resignation. If his claim was true, he did not fully comprehend the import of the letter, rendering the resignation farcical; the doubt would then be justifiably raised against the letter being at all intended to end his employment. Under the circumstances, DMCI became burdened with the obligation to prove the due execution and genuineness of the document as a letter of resignation. It is axiomatic in labor law that the employer who interposes the defense of voluntary resignation of the employee in an illegal dismissal case must prove by clear, positive and convincing evidence that the resignation was voluntary; the employer cannot rely on the weakness of the defense of the employee. The requirement rests on the need to resolve any doubt in favor of the working man.

• Regular Employment under Article 280 — An employment is deemed regular where the employee has been engaged to perform activities usually necessary and desirable to the usual business or trade of the employer, notwithstanding written or oral agreement to the contrary, except where the employment has been fixed for a specific project or undertaking whose completion or termination has been determined at the time of engagement, or where the work is seasonal. The Court applied this to hold that Bello's work as a mason was necessary and desirable to DMCI's construction business and that his repeated rehiring made him a regular employee.
• Project Employee — A project employee is one hired for a specific project or undertaking, and the completion or termination of such project or undertaking has been determined at the time of engagement. 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 he is engaged for the project. Bello was initially a project employee but later acquired regular status.
• Extension of Project Employment — The extension of the employment of a project employee long after the supposed project has been completed removes the employee from the scope of a project employee and makes him a regular employee. Bello's successive reengagements over eight years brought him within this rule.
• Employer's Burden in Voluntary Resignation — The employer who interposes the defense of voluntary resignation in an illegal dismissal case must prove by clear, positive and convincing evidence that the resignation was voluntary; the employer cannot rely on the weakness of the employee's evidence. Any doubt must be resolved in favor of the working man. DMCI failed to discharge this burden.
• Actual Functions and Length of Service Over Categorization — The employer's categorization of the employee's status is not decisive; the employee's actual functions and the length of his stay with the employer are of consequence. Despite DMCI's project contracts, Bello's actual functions and long service made him regular.
• Respect for Labor Arbiter's Factual Findings — Findings of the first-line trier of facts are accorded respect; an appellate forum like the NLRC cannot disregard them based on a speculative and whimsical statement. The ELA's handwriting observation and credibility finding were upheld.

• "For the resignation of an employee to be a viable defense in an action for illegal dismissal, an employer must prove that the resignation was voluntary, and its evidence thereon must be clear, positive and convincing. The employer cannot rely on the weakness of the employee's evidence." — This opening statement states the employer's burden and the evidentiary standard for voluntary resignation, the core rule applied to reject DMCI's defense.
• "It is settled that the extension of the employment of a project employee long after the supposed project has been completed removes the employee from the scope of a project employee and makes him a regular employee." — This rule supports the holding that Bello's successive reengagements removed him from project employment and conferred regular status.
• "We reiterate that it is axiomatic in labor law that the employer who interposes the defense of voluntary resignation of the employee in an illegal dismissal case must prove by clear, positive and convincing evidence that the resignation was voluntary; and that the employer cannot rely on the weakness of the defense of the employee." — This reiterates the axiomatic labor-law burden on the employer and explains why DMCI's reliance on Bello's alleged signature was insufficient.
• "The requirement rests on the need to resolve any doubt in favor of the working man." — This states the policy basis for resolving doubts in favor of the working man, supporting the rejection of the resignation defense.

• Philippine National Construction Corporation vs. NLRC, G.R. No. 85323, June 20, 1989, 174 SCRA 191, 193; Uy vs. National Labor Relations Commission, G.R. No. 117983, September 6, 1996, 261 SCRA 505, 513 — Cited for the definition of a project employee.
• Tomas Lao Construction vs. National Labor Relations Commission, G.R. No. 116781, September 5, 1997, 278 SCRA 716, 726, citing Phesco, Inc. vs. National Labor Relations Commission, G.R. Nos. 104444-49, December 27, 1994, 239 SCRA 446; Capitol Industrial Construction Groups vs. NLRC, G.R. No. 105359, April 22, 1993, 221 SCRA 469 — Cited for the rule that the extension of a project employee's employment long after the project's completion makes the employee regular.
• ALU-TUCP vs. National Labor Relations Commission, G.R. No. 109902, August 2, 1994, 234 SCRA 678, 685 — Cited for the principal test for determining whether an employee is a project employee.
• Samson vs. National Labor Relations Commission, G.R. No. 113166, February 1, 1996, 253 SCRA 112, 123 — Cited for the proposition that successive reengagement to perform the same kind of work manifests the necessity and desirability of the work to the employer's business.
• Vicente vs. Court of Appeals, G.R. No. 175988, August 24, 2007, 53 I SCRA 240, 250; Mobile Protective & Detective Agency vs. Ompad, G.R. No. 159195, May 9, 2005, 458 SCRA 308, 323 — Cited for the employer's burden to prove voluntary resignation by clear, positive and convincing evidence.

• Article 280, Labor Code — Defines regular and casual employment. It provides that employment is regular where the employee has been engaged to perform activities usually necessary and desirable to the usual business or trade of the employer, except for project or seasonal employment. The Court applied it to hold that Bello's work as a mason was necessary and desirable to DMCI's construction business and that his repeated rehiring made him regular.
• Article 282, Labor Code — Cited in the CA's ruling, as summarized by the Supreme Court, for the proposition that the completion of the phase of work is not a valid cause for dismissing a regular employee. The CA found the cause of Bello's dismissal invalid under this provision.
• Policy Instruction No. 20, as revised by Department Order No. 19, series of 1993 — Required project employers to report to the Department of Labor and Employment every termination of projects. DMCI claimed compliance, but the CA held that such compliance could not preclude the acquisition of tenurial security by the employee.

Chief Justice Maria Lourdes P. A. Sereno; Associate Justice Teresita J. Leonardo-De Castro; Associate Justice Martin S. Villarama, Jr.; Associate Justice Bienvenido L. Reyes.