D.M. Consunji, Inc. vs. Jamin

A project employee who is continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks, and whose tasks are vital, necessary, and indispensable to the usual business or trade of the employer, must be deemed a regular employee, regardless of the existence of successive project employment contracts.

D.M. Consunji, Inc. (DMCI) is a construction company that engages workers on a project-to-project basis. Estelito L. Jamin was hired by DMCI on December 17, 1968 as a laborer and later became a helper carpenter. DMCI's practice was to enter into employment contracts — appointment papers to which the worker signified conformity — each time it needed a worker's services, and to serve termination papers upon completion of every project or phase thereof, accompanied by termination reports submitted to the DOLE. The legal framework governing the distinction between project and regular employment is found in Article 280 of the Labor Code, DOLE Policy Instructions No. 20, and DOLE Department Order No. 19, Series of 1993, which provide the indicators for determining employment status in the construction industry.

On December 17, 1968, D.M. Consunji, Inc. (DMCI), a construction company, hired Estelito L. Jamin as a laborer. Sometime in 1975, Jamin became a helper carpenter. Since his initial hiring, Jamin's employment contract had been renewed a number of times. Each time DMCI needed his services, Jamin entered into a contract of employment — actually an appointment paper to which he signified his conformity — designating him as a field worker, temporary worker, casual employee, or project employee. Upon completion of every project or phase of the project where he worked, a termination of employment paper was served on him, and DMCI would submit termination of employment reports to the DOLE containing the names of a number of employees including Jamin.

On March 20, 1999, Jamin's work at DMCI was terminated due to the completion of the SM Manila project. This termination marked the end of his employment with DMCI as he was not rehired again. On April 5, 1999, Jamin filed a complaint for illegal dismissal with several money claims, including attorney's fees, against DMCI and its President/General Manager, David M. Consunji. Jamin alleged that DMCI terminated his employment without a just and authorized cause at a time when he was already 55 years old and had no independent source of livelihood. He claimed that he rendered service to DMCI continuously for almost 31 years. In addition to the schedule of projects submitted by DMCI to the labor arbiter, Jamin alleged that he worked on three other DMCI projects that the company had not disclosed: the Twin Towers, Ritz Towers, from July 29, 1980 to June 12, 1982; the New Istana Project in B.S.B. Brunei, from June 23, 1982 to February 16, 1984; and another New Istana Project phase from January 24, 1986 to May 25, 1986.

DMCI denied liability, arguing that it hired Jamin on a project-to-project basis from the start of his engagement in 1968 until the completion of the SM Manila project. It maintained that it submitted a report to the DOLE every time it terminated Jamin's services. The labor arbiter sustained DMCI's position, finding Jamin to be a project employee whose services had been terminated due to completion of the project. The NLRC affirmed this finding on appeal. The CA, however, reversed these rulings, declaring Jamin a regular employee based on his repeated and successive rehiring across DMCI's various projects and the nature of his work — performing activities necessary or desirable in DMCI's construction business. The CA noted that DMCI failed to submit termination reports to the DOLE Regional Office every time Jamin's employment was terminated, as required by DOLE Policy Instructions No. 20, and found that the existence of project employment contracts was not always conclusive of a worker's actual employment status.

• Misapplication of Article 280: DMCI argued that the CA misapplied the phrase "usually necessary or desirable in the usual business or trade of the employer" when it considered Jamin a regular employee, since the definition of a regular employee under Article 280 of the Labor Code does not apply to project employment, as interpreted in Fernandez vs. National Labor Relations Commission and D.M. Consunji, Inc. vs. NLRC.
• No Work Pool: DMCI maintained that there is no work pool in its roster of project employees and that the CA erred in insinuating that Jamin belonged to a work pool when it cited the Integrated Contractor and Plumbing Works, Inc. ruling; Jamin presented no evidence of membership in any work pool.
• Termination Reports: DMCI contended that the CA misinterpreted the rules requiring submission of termination reports to the DOLE, as the report is only one of several indicators of project employment. It argued that the CA penalized it for a few lapses in its submission of reports through a very rigid application of the rule despite overwhelming evidence that Jamin was a project employee.
• Due Process: DMCI argued that the CA erred in holding that Jamin was dismissed without due process. Since Jamin was not dismissed for cause, there was no need to furnish him a written notice of the grounds for dismissal or to conduct a hearing. Pursuant to the rules implementing the Labor Code, if the termination is brought about by completion of the contract or phase thereof, no prior notice is required.
• Grave Abuse of Discretion: DMCI objected to the CA's reversal of the findings of the labor arbiter and the NLRC in the absence of any showing that the labor authorities committed grave abuse of discretion, disregarded evidence, or arrived at their rulings arbitrarily.

• Late Filing: Jamin prayed for outright dismissal of the petition, arguing that DMCI received a copy of the CA decision on March 4, 2010, and filed its motion for reconsideration on March 22, 2010 — three days beyond the 15-day reglementary period, rendering the CA decision final and executory.
• Misreading of Precedents: Jamin contended that DMCI misread the Court's rulings in Fernandez and D.M. Consunji, Inc. vs. NLRC. In Fernandez, the Court explained that the proviso in the second paragraph of Article 280 relates only to casual employees, and the Court found that Fernandez had not continuously worked for the company but only intermittently. Jamin also pointed out that in the D.M. Consunji, Inc. case, the complainants were not claiming to be regular employees but were questioning the termination of their employment before the completion of the project without just cause and due process.
• Failure to Submit Termination Reports: Jamin disputed DMCI's claim that it committed only a few lapses in the reportorial requirement, maintaining that even the NLRC noted there were no termination reports with the DOLE Regional Office after every completion of a phase of work. He contended that the CA committed no error in holding that DMCI's failure to submit reports was an indication that he was not a project employee.
• Illegal Dismissal: Jamin argued that as a regular employee of DMCI for almost 31 years, the termination of his employment was without just cause and due process.

• Timeliness of Petition: Whether DMCI's motion for reconsideration before the CA, and consequently its petition for review on certiorari before the Supreme Court, were filed within the reglementary period.
• Employment Status: Whether Jamin was a project employee or had attained the status of a regular employee by virtue of his repeated, continuous, and successive rehiring over almost 31 years.
• Due Process in Termination: Whether DMCI was required to serve prior notice to Jamin before terminating his employment upon completion of the SM Manila project.
• Personal Liability of David M. Consunji: Whether DMCI's President/General Manager, David M. Consunji, could be held personally liable for Jamin's dismissal.

• Timeliness of Petition: No. DMCI's motion for reconsideration was filed three days late, rendering the CA decision final and executory; the petition for review on certiorari was likewise late, having only fifteen days from notice of the CA decision or from denial of a timely motion for reconsideration.
• Employment Status: No, Jamin was not a project employee. His repeated, continuous, and successive rehiring across 38 projects over almost 31 years, performing carpentry tasks necessary and desirable to DMCI's construction business, had transformed his status into that of a regular employee pursuant to the rule in Maraguinot Jr. vs. NLRC and Liganza vs. RBL Shipyard Corporation.
• Due Process in Termination: N/A. Having ruled that Jamin was a regular employee, the issue of whether prior notice was required for project completion termination became academic; the CA's finding of illegal dismissal for lack of valid cause and due process was affirmed.
• Personal Liability of David M. Consunji: No. In the absence of any express finding of Mr. Consunji's involvement in Jamin's dismissal, and as the matter was never raised by the parties before the CA or the Supreme Court, he was absolved of liability.

• Timeliness of Petition: The records established that DMCI received its copy of the February 26, 2010 CA decision on March 4, 2010 (a Thursday), as indicated in its own motion for reconsideration — not on March 5, 2010 as stated in the petition. The deadline for filing the motion for reconsideration was March 19, 2010 (15 days from receipt), but it was filed only on March 22, 2010, three days late. The late filing rendered the CA decision final and executory. Necessarily, the petition for review on certiorari was also late, as DMCI had only fifteen days from notice of the CA decision to file the petition or from the denial of a motion for reconsideration filed in due time. The Court declined to exercise liberality, as it saw no point in disregarding the late filing given that the petition lacked merit.

• Employment Status: While DMCI's project employment contracts with Jamin showed on their face that he was engaged as a project employee, the Court looked beyond the contracts to the actual circumstances of the employment. For almost 31 years, DMCI had repeatedly, continuously, and successively engaged Jamin's services — a total of 38 times (35 as shown by DMCI's own schedule of projects and three more identified by Jamin). The three additional projects — Ritz Towers (July 29, 1980 to June 12, 1982), New Istana Project in Brunei (June 23, 1982 to February 16, 1984), and another New Istana Project phase (January 24, 1986 to May 25, 1986) — filled gaps that DMCI's schedule had created, giving the false impression of substantial breaks in Jamin's employment. In all 38 projects, the tasks Jamin performed as a carpenter were indisputably necessary and desirable in DMCI's construction business. Applying Maraguinot Jr. vs. NLRC, once a project or work pool employee has been continuously, as opposed to intermittently, rehired by the same employer for the same tasks, and these tasks are vital, necessary, and indispensable to the usual business or trade of the employer, the employee must be deemed a regular employee. Applying Liganza, 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 employer's usual business. Jamin's employment ceased to be coterminous with specific projects when he was repeatedly rehired due to the demands of DMCI's business.

• Due Process in Termination: With the ruling that Jamin had been a regular employee, the issue of whether DMCI submitted termination of employment reports pursuant to DOLE Policy Instructions No. 20 and DOLE Department Order No. 19, Series of 1993, became academic. The CA had already found the dismissal illegal for lack of valid cause and due process, and that finding was affirmed.

• Personal Liability of David M. Consunji: The CA made no pronouncement on whether DMCI's President/General Manager was also liable, and neither party raised the matter before the CA or the Supreme Court. Absent any express finding of Mr. Consunji's involvement in Jamin's dismissal, the Court deemed it proper to absolve him of liability.

• Regular vs. Project Employment — The Maraguinot Test — A project or work pool employee who has been (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks, and (2) whose tasks are vital, necessary, and indispensable to the usual business or trade of the employer, must be deemed a regular employee. The Court applied this two-pronged test to Jamin, finding both elements satisfied: his rehiring was continuous across 38 projects over 31 years, and his carpentry work was necessary and desirable to DMCI's construction business.

• Length of Service as Indicator of Employment Status (Liganza) — 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 employer's usual business or trade. Where an employee has been a project employee several times over and has been repeatedly rehired due to the demands of the employer's business, the employment ceases to be coterminous with specific projects.

• Project Employment Contracts Not Conclusive (Liganza) — The existence of project employment contracts is not always conclusive of a worker's employment status. Courts may pierce the cover of project employment contracts to determine the employee's actual status based on the circumstances of employment, including the pattern of rehiring and the nature of the work performed.

• Finality of Judgment Upon Late Filing — A motion for reconsideration filed beyond the 15-day reglementary period renders the assailed decision final and executory. A subsequent petition for review on certiorari is likewise late, as the period for filing is counted from notice of the decision or from the denial of a timely motion for reconsideration. The Court declined to exercise liberality where the petition lacked merit.

• "Assuming, without granting[,] that [the] petitioner was initially hired for specific projects or undertakings, the repeated re-hiring and continuing need for his services for over eight (8) years have undeniably made him a regular employee." — This passage from Liganza vs. RBL Shipyard Corporation, quoted and applied by the Court, articulates the principle that repeated rehiring transforms project employment into regular employment, and served as the direct basis for ruling in Jamin's favor.

• "Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, [private] respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioner's business." — This passage from Liganza, quoted in the decision, clarifies the relationship between length of service and the project-employment inquiry, and was held squarely applicable to Jamin's case.

• "The import of this decision is not to impose a positive and sweeping obligation upon the employer to re-hire project employees. What this decision merely accomplishes is a judicial recognition of the employment status of a project or work pool employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the employer of project or work pool employees who perform tasks necessary or desirable to the employer's usual business or trade." — This cautionary statement from Maraguinot, reiterated by the Court, defines the scope and limits of the doctrine: it does not compel rehiring but recognizes the employment status that continuous rehiring has in fact created.

• Liganza vs. RBL Shipyard Corporation, G.R. No. 159862, October 17, 2006, 504 SCRA 678 — Controlling precedent directly applied. The Court held that repeated rehiring and continuing need for services over an extended period undeniably make an initially project-based employee a regular employee, and that length of time, while not the controlling test, is vital in determining employment status.
• Maraguinot, Jr. vs. NLRC, 348 Phil. 580 (1998) — Controlling precedent providing the two-pronged test for determining when a project or work pool employee attains regular status: continuous (not intermittent) rehiring for the same tasks, and tasks vital, necessary, and indispensable to the employer's usual business.
• Fernandez vs. National Labor Relations Commission, G.R. No. 106090, February 28, 1994, 230 SCRA 460 — Distinguished. DMCI cited this case to argue that Article 280 does not apply to project employment, but Jamin correctly pointed out that Fernandez involved intermittent employment with clear gaps, unlike Jamin's continuous rehiring.
• D.M. Consunji, Inc. vs. NLRC, 401 Phil. 635 (2000) — Distinguished. DMCI cited this case for the proposition that length of service is not the controlling test of employment tenure, but Jamin noted that the complainants in that case were not claiming regular employment status, unlike Jamin.
• Integrated Contractor and Plumbing Works, Inc. vs. NLRC, 503 Phil. 875 (2005) — Followed in part. The CA relied on this case for the principle that a worker who performed tasks necessary or desirable in the employer's usual business and belonged to a work pool was a regular employee. The Supreme Court applied the principle regarding the nature of the tasks but noted that work pool membership was not essential to the finding of regular employment.
• Baguio Country Club Corporation vs. NLRC, G.R. No. 71664, February 28, 1992, 206 SCRA 643 — Cited by the CA for the principle that the pattern of rehiring and recurring need for services are sufficient evidence of the necessity and indispensability of such services to the employer's business.
• Orozco vs. Fifth Division of the Court of Appeals, 497 Phil. 227 (2005) — Distinguished. DMCI's invocation of liberality was rejected; the Court declined to apply the liberality exercised in Orozco because the petition lacked merit.

• Article 280, Labor Code of the Philippines — Defines regular and casual employment. The proviso in the second paragraph, relating to casual employees who render at least one year of service, was distinguished from the situation of project employees. The Court applied the principle that an employee engaged to perform activities usually necessary or desirable in the usual business or trade of the employer is a regular employee, unless the employment has been fixed for a specific project or undertaking the completion or termination of which is determined at the time of engagement.
• DOLE Policy Instructions No. 20 (Series of 1977) — Provides that project employees are not entitled to termination pay upon completion of the project or phase thereof, and that the company is required to submit a report to the nearest Public Employment Office for statistical purposes. The CA found DMCI's failure to submit termination reports as an indication that Jamin was not a project employee.
• DOLE Department Order No. 19, Series of 1993 — Superseded DOLE Policy Instructions No. 20 and provides that the termination report is one of the indicators of project employment.
• Rules of Court, Rule 45, Section 1 — Governs petitions for review on certiorari before the Supreme Court, providing a fifteen-day period from notice of the judgment or from denial of a timely motion for reconsideration.
• Omnibus Rules Implementing the Labor Code, Book VI, Rule I, Section 1(d)(iii) — Provides that if termination is brought about by completion of the contract or phase thereof, no prior notice is required. DMCI invoked this provision, but it became academic once Jamin was found to be a regular employee.

Antonio T. Carpio (Chairperson), Diosdado M. Peralta, Jose Portugal Perez, and Maria Lourdes P. A. Sereno concurred in the decision. No separate concurring opinions were written.