Jovero vs. Cerio

A party’s failure to perfect an appeal within the reglementary period renders the judgment final and executory and deprives the appellate tribunal of jurisdiction; and service contracts between an employer and its client do not establish that the employer’s workers are project employees absent individual employment contracts or proof that the workers were informed of project employment at hiring.

Sigma Construction and Supply, an independent contractor owned by Eduardo G. Jovero, supplied workers to Philippine Geothermal Inc. (PGI) under service contracts. Respondents were cement cutters whom Sigma hired and assigned to PGI’s drilling site. The dispute concerns whether they were project employees whose employment was coterminous with Sigma’s PGI projects or regular employees of Sigma.

Rogelio Cerio, Jesus Alburo, Jr., Gil Clavecillas, Domingo Zepeda, Raul Clerigo, Domingo Cantes, Marcelino Copino, Ceazar Cañezo, Levy Legazpi, Eustaquio Rangasa, Elmar Convencido, and Achiles Dycoco were hired on various dates by Sigma Construction and Supply, a business owned by Eduardo G. Jovero, to work as cement cutters at PGI’s drilling site starting April 1990. PGI preterminated one of its contracts with Sigma on April 1, 1993, although that contract was initially supposed to end on October 31, 1993. Because of the pretermination, Sigma’s project manager issued a notice to all cement cutters informing them that the contract with PGI would be effective only until April 30, 1993.

Sometime in August 1993, respondents filed a complaint for illegal dismissal, underpayment of wages, and non-payment of labor standard benefits against Sigma and PGI. The case was consolidated with the cases of Job Capis, et al. and Crispino Miguel, et al.

Jovero alleged that Sigma was an independent contractor that hired respondents as project employees for its projects with PGI. He claimed that respondents’ services were coterminous with Sigma’s projects with PGI, that they were hired and rehired according to the duration of those contracts, and that PGI’s pretermination of its latest contract forced Sigma to terminate them. He also claimed that respondents were paid wages and benefits in accordance with law.

Respondents, for their part, argued that they were not merely project employees because they were continuously hired and assigned to different PGI projects from the beginning of their employment in 1990 until their termination in 1993. They claimed they were transferred to other projects even before the completion of a previously assigned project and that they performed work beyond cement cutting, such as cleaning canals and pipes and fixing tools at PGI.

Executive Labor Arbiter Rivera found that respondents had been continuously hired and employed for more than a year, were transferred to various projects even before completion of prior assignments, and performed tasks not limited to cement cutting; Jovero submitted no evidence to controvert these allegations and no employment records or termination reports to the DOLE to show project employment. In his appeal to the NLRC, Jovero attached Sigma’s service contracts with PGI and reiterated that respondents’ hiring and rehiring followed the contract periods May 1 to December 31, 1990; August 1 to October 31, 1991; May 1, 1992 to April 30, 1993; and January 1 to October 31, 1993. No individual employment contracts between Sigma and respondents were presented. The NLRC admitted the service contracts despite their belated submission, and respondents did not dispute their genuineness and authenticity. The CA later found that Jovero’s appeal to the NLRC was filed beyond the reglementary period because his counsel received the Labor Arbiter’s Decision on August 21, 2001, not September 11, 2001, making the last day for appeal August 31, 2001.

• Belated Appeal / Substantial Justice: Petitioner averred that the NLRC aptly decided the case on the merits rather than on mere technicality, in the higher interest of substantial justice, and that his appeal to the NLRC should be given due course despite being filed beyond the reglementary period.
• Project Employment: Petitioner maintained that respondents were project employees whose hiring and rehiring were based on the duration of Sigma’s contracts with PGI; their services were coterminous with those projects, and PGI’s pretermination of its contract with Sigma forced their termination.
• Scope of Work: Petitioner argued that the tasks performed by respondents did not pertain to different kinds of work because cleaning canals and pipes and fixing tools were included in PGI’s contract with Sigma under its Scope of Work.
• Wages and Benefits: Petitioner claimed that respondents were paid wages and benefits in accordance with law.
• Cartagenas Precedent: Petitioner cited Cartagenas vs. Romago Electric Co., Inc. as a similar factual milieu, where employees were held not permanent or regular because their employment duration was coterminous with the projects assigned to them.
• Late Petition / OFW: Petitioner claimed he was working abroad as an OFW and returned only on July 6, 2012, and during the interim he could not communicate to his counsel his intention to file a Petition for Review on Certiorari.

• Finality of Labor Arbiter Decision: Respondents averred that the Labor Arbiter’s Decision had already become final and executory because the ten-day period within which to appeal had lapsed before petitioner filed his appeal.
• Grave Abuse of Discretion: Respondents filed a Petition for Certiorari before the CA alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC when it gave due course to Jovero’s appeal despite filing it beyond the reglementary period.
• Regular Employment: Respondents argued that they were not just project employees because they were continuously hired and assigned to different PGI projects from the beginning of their employment in 1990 until their termination in 1993, were transferred to other projects even before completion of a previously assigned project, and performed work beyond cement cutting, such as cleaning canals and pipes and fixing tools.
• Labor Standards: Respondents claimed underpayment of wages and non-payment of labor standard benefits.

• Timeliness of Petition: Whether the Petition for Review on Certiorari filed about nine months after the lapse of the reglementary period may be given due course.
• Timeliness of Appeal to NLRC: Whether the NLRC can give due course to Jovero’s appeal filed beyond the reglementary period.
• Employment Status and Illegal Dismissal: Whether respondents were regular employees and illegally dismissed by petitioner.

• Timeliness of Petition: No. The petition was filed about nine months after the reglementary period, and petitioner’s OFW justification was unsubstantiated; the SC nonetheless took cognizance to put the issues to rest.
• Timeliness of Appeal to NLRC: No. The appeal was filed beyond the reglementary period; perfection of appeal is jurisdictional, and the NLRC gravely abused its discretion in entertaining it.
• Employment Status and Illegal Dismissal: Yes. Respondents were regular employees illegally dismissed; petitioner failed to prove project employment by substantial evidence, as the service contracts with PGI did not show respondents were parties or informed of project employment at hiring.

• Timeliness of Petition: The SC first noted that petitioner received the CA Resolution dated September 26, 2011 on October 5, 2011. Under Rule 45, the period to file a petition for review is 15 days from notice, so petitioner had until October 20, 2011. The petition was filed only on July 19, 2012, about nine months after the reglementary period lapsed. Petitioner claimed he was an OFW who returned on July 6, 2012 and could not communicate with counsel, but the SC found this unsubstantiated because no travel records were provided. Notwithstanding the technical infirmities, the SC deemed it judicious to take cognizance of the case to put the issues to rest.
• Timeliness of Appeal to NLRC: The SC agreed with the CA that the NLRC gravely abused its discretion in giving due course to Jovero’s appeal. When a party is represented by counsel of record, service of orders and notices must be made upon counsel, and notice to counsel is tantamount to notice to the client. The 2011 NLRC Rules of Procedure, Rule III, Section 4, requires service of decisions and final awards on both parties and their counsel and counts the appeal period from receipt by counsel or representative of record. The Bailiff Proof of Service and Notice of Judgment/Final Order showed that Jovero’s counsel received Labor Arbiter Rivera’s Decision on August 21, 2001, not September 11, 2001; the last day to appeal was August 31, 2001, and the appeal was filed 21 days after the lapse of the reglementary period. Perfection of an appeal in the manner and within the period prescribed by law is not a mere technicality but jurisdictional; failure to perfect it renders the judgment final and executory and deprives the appellate body of jurisdiction. The SC cited Paramount Vinyl Products Corporation vs. National Labor Relations Commission and Mai Philippines Inc. vs. National Labor Relations Commission. Although procedural lapses may be disregarded, strong and compelling reasons are required; none existed here.
• Employment Status and Illegal Dismissal: The SC concurred with the Labor Arbiter and CA that respondents were regular employees. The principal test for project employment 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 of engagement, or where the work is seasonal and employment is for the duration of the season. A true project employee must be assigned to a project that begins and ends at determined or determinable times and must be informed of that fact at the time of hiring. Jovero relied on Sigma’s service contracts with PGI, but these contracts did not show that respondents were parties or that they were hired for those projects. Under Olongapo Maintenance Services, Inc. vs. Chantengco, presenting service contracts between the employer and its client, even if they show the duration of the project, does not establish that the employees are project employees absent their individual employment contracts. Cartagenas vs. Romago Electric Co., Inc. was different because the employer there presented documentary exhibits showing assignment to various projects, temporary layoff, rehire, and project employment contracts between employer and employees. Here, no individual contracts or proof that respondents were informed at hiring of project employment was presented. Petitioner’s failure to file termination reports at the end of each project also indicated that respondents were regular employees. Thus, petitioner failed to prove project employment by substantial evidence, and respondents were illegally dismissed for failure to comply with the substantive and procedural due process requirements under the Labor Code.

• Project Employee — An employee is a project employee when assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time of engagement, or where the work is seasonal and employment is for the duration of the season. A true project employee must be assigned to a project that begins and ends at determined or determinable times and must be informed thereof at the time of hiring. The SC applied this test and found Jovero failed to prove respondents were project employees.
• Service Contracts with Client Are Not Enough — Presentation of service contracts between the employer and its client, even if they show the duration of the project, in lieu of the employees’ individual employment contracts, does not establish that the employees are project employees. The SC applied this because Jovero presented only Sigma’s service contracts with PGI.
• Perfection of Appeal Is Jurisdictional — Perfection of an appeal in the manner and within the period prescribed by law is not a mere technicality but jurisdictional; failure to perfect it renders the judgment final and executory and deprives the appellate body of jurisdiction to alter it. The SC applied this to Jovero’s late appeal to the NLRC.
• Notice to Counsel Is Notice to Client — When a party is represented by counsel of record, service of orders and notices must be made upon counsel, and such notice to counsel is tantamount to notice to the client; the appeal period is counted from receipt by counsel. The SC applied this to find Jovero’s appeal late.
• Liberal Application of Procedural Rules Requires Strong Compelling Reasons — Procedural lapses may be disregarded and appeals filed beyond the reglementary period may be given due course only for strong and compelling reasons. The SC found no such reasons for the late NLRC appeal.
• Equity Jurisdiction in Conflicting Factual Findings — Although a Rule 45 petition should raise only questions of law, the SC may exercise equity jurisdiction and review the records when the factual findings of the Labor Arbiter, NLRC, and CA conflict. The SC applied this because the Labor Arbiter and CA found regular employment while the NLRC found project employment.
• Termination Reports as Indicia of Regular Employment — Failure to file termination reports at the end of each project is an indication that the employees are regular employees. The SC used this against Jovero.

• "The principal test in determining whether an employee is a project employee is whether he/she is assigned to carry out a 'specific project or undertaking,' the duration and scope of which are specified at the time the employee is engaged in the project, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season." — This defines the principal test for project employment and anchors the SC’s ruling that Jovero failed to prove respondents were project employees.
• "Clearly, the presentation of service contracts between the employer and their client (even if it shows the duration of the project), in lieu of the employees' individual employment contracts, does not establish that the latter are project employees." — This is the core reason Sigma’s service contracts with PGI did not prove project employment.
• "Lest we forget, perfection of an appeal in the manner and within the period prescribed by law is not a mere technicality, but jurisdictional." — This underpins the SC’s holding that the NLRC gravely abused its discretion in entertaining Jovero’s late appeal.
• "When a party is represented by counsel of record, service of orders and notices must be made upon such counsel." — This supports the finding that receipt by Jovero’s counsel on August 21, 2001 started the appeal period.

• Paramount Vinyl Products Corporation vs. National Labor Relations Commission, G.R. No. 81200, October 17, 1990, 190 SCRA 525 (2009) — Controlling precedent on the jurisdictional nature of perfecting an appeal; quoted by the SC.
• Mai Philippines Inc. vs. National Labor Relations Commission, 235 Phil. 186 (1987) — Followed; the NLRC gravely abused its discretion in entertaining a late appeal.
• Cartagenas vs. Romago Electric Co., Inc., 258 Phil. 445 (1989) — Distinguished; unlike this case, the employer presented individual project employment contracts and proof of project assignments, layoffs, and rehiring.
• Olongapo Maintenance Services, Inc. vs. Chantengco, 552 Phil. 338 (2007) — Applied; service contracts between the employer and its client do not prove project employment absent individual employment contracts.
• Philippine Long Distance Telephone Company vs. Ylagan, 537 Phil. 840 (2006) — Cited in Olongapo for the rule that failure to file termination reports indicates regular employment.
• Metropolitan Manila Development Authority vs. Jancom Environmental Corporation, 425 Phil. 961, 973 (2002) — Cited to support the SC’s taking cognizance of the case despite technical infirmities.
• PCL Shipping Philippines, Inc. vs. National Labor Relations Commission, 540 Phil. 65, 74-75 (2006) — Cited for the SC’s equity jurisdiction when factual findings of the labor tribunals conflict.
• Tiu vs. Pasaol, 450 Phil. 370, 379 (2003) — Cited for the general rule that a Rule 45 petition should raise only questions of law.

• Rule 45, Rules of Court — Provides that a petition for review on certiorari must be filed within 15 days from notice of the judgment or final order or resolution appealed from and should raise only questions of law. The SC applied it to find Jovero’s petition filed about nine months late and to note the general rule against factual review, subject to equity jurisdiction.
• 2011 NLRC Rules of Procedure, Rule III, Section 4 — Requires service of notices, resolutions, orders, and decisions on the parties and their counsel, counts the appeal period from receipt by counsel or representative of record, and requires the bailiff or serving officer to submit a return. The SC applied it to hold that Jovero’s counsel received the Labor Arbiter’s Decision on August 21, 2001 and that the appeal was late.
• Labor Code, as amended — Applied to determine whether respondents were project or regular employees and whether their dismissal complied with substantive and procedural due process; the SC found petitioner failed to prove project employment and that respondents were regular employees illegally dismissed.