Leyte Geothermal Power Progressive Employees Union - ALU - TUCP vs. PNOC-EDC

An employee engaged for a specific project or undertaking, the completion or termination of which has been determined at the time of engagement, is a project employee, and the lack of intervals in employment contracts does not convert such status to regular employment if the work is genuinely coterminous with the project; further, a strike conducted without complying with the mandatory cooling-off period, strike vote, and strike ban is illegal.

PNOC-EDC, a government-owned and controlled corporation engaged in geothermal energy, operates the Leyte Geothermal Power Project. It hired hundreds of employees on a contractual basis for the project's duration. The Leyte Geothermal Power Progressive Employees Union - ALU - TUCP demanded recognition as the collective bargaining agent, which PNOC-EDC refused. As the project neared completion in 1998, PNOC-EDC served termination notices on the employees, who were mostly union members.

• Nature of Employment: Respondent PNOC-EDC is a GOCC engaged in geothermal energy. It hired hundreds of employees on a contractual basis for the Leyte Geothermal Power Project, which provides power to the Visayas and Luzon grids. The employees' employment contracts specified the specific project or phase of work and fixed the period of employment, which was to automatically expire upon project completion.
• The Dispute: Majority of the employees hired for the project became members of petitioner Union. Petitioner demanded recognition as the collective bargaining agent and CBA negotiation, which respondent ignored. Sometime in 1998, as the project was about to be completed, respondent served Notices of Termination on the employees.
• The Strike: On December 28, 1998, petitioner filed a Notice of Strike on grounds of unfair labor practice, union busting, and mass termination. On the same day, petitioner declared and staged a strike, taking control of respondent's facilities.
• Secretary of Labor Intervention: To avert work stoppage that jeopardized the power supply in the Luzon and Visayas grids, Secretary of Labor Bienvenido Laguesma certified the labor dispute to the NLRC for compulsory arbitration on January 4, 1999. The Secretary directed the striking workers to return to work and the employer to accept them under the same terms and conditions. Petitioner remained adamant, causing the failure of negotiation and non-compliance with the assumption order.
• The Complaint: On January 15, 1999, respondent filed a Complaint for Strike Illegality, Declaration of Loss of Employment, and Damages, and a Petition for Cancellation of Petitioner’s Certificate of Registration. The cases were consolidated.

• Regular Employment Status: Petitioner argued that its members performed activities usually necessary and desirable to respondent's usual business, specifically as carpenters and masons in the Construction Department. The lack of interval in the employment contracts manifests that the undertaking is usually necessary or desirable to the usual trade or business of the employer.
• Pretextual Termination: Petitioner maintained that the termination was not due to project completion, citing that 56.25% of civil/structural work remained to be accomplished. Petitioner alleged the mass dismissal was aimed at ridding the company of union members (union busting).
• No Illegal Strike: Petitioner contended that there was no work stoppage; thus, the activity was merely a "protest activity" or picketing, not a strike as defined under Article 212(o) of the Labor Code.

• Project Employment Status: Respondent argued that the employees were project employees hired for a specific undertaking with a determined completion date. The employment contracts were signed voluntarily, specifying the project and fixed period of employment.
• Illegal Strike: Respondent maintained that the strike was illegal for failure to comply with the mandatory requirements of the law, specifically the absence of a strike vote, failure to observe the cooling-off period, and non-compliance with the 7-day strike ban.

• Employment Status: Whether the officers and members of petitioner Union are project employees of respondent.
• Strike Illegality: Whether the officers and members of petitioner Union engaged in an illegal strike.

• Employment Status: The officers and members of petitioner Union were correctly classified as project employees. The principal test for project employment is whether the employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time of engagement. The employees signed contracts indicating the specific project and fixed period of employment voluntarily. The lack of intervals in employment does not convert project employment to regular employment. The one-year service proviso in Article 280 of the Labor Code applies only to casual employees, not project employees; thus, length of service does not regularize a project employee whose employment is coterminous with the project. Consequently, the claim of union busting was dismissed, the termination being valid due to project completion.
• Strike Illegality: The strike was illegal for failure to comply with mandatory procedural requirements. Petitioner filed a notice of strike and staged the strike on the same day, failing to observe the cooling-off period. No strike vote was conducted, and the 7-day strike ban was not observed. The factual findings of the NLRC, affirmed by the CA, that a strike occurred are binding and conclusive, negating the petitioner's contention that it merely engaged in picketing or a protest activity.

• Test for Project Employment — The principal test for determining whether particular employees are properly characterized as "project employees" as distinguished from "regular employees" is whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration (and scope) of which were specified at the time the employees were engaged for that project. The Court applied this test to hold that the employees hired for the Leyte Geothermal Power Project were project employees, their employment having been fixed for a specific project with a determined completion date at the time of engagement.
• Applicability of the One-Year Service Proviso — The proviso in the second paragraph of Article 280 of the Labor Code, which deems casual employees who have rendered at least one year of service as regular employees, applies only to casual employees and not to project employees. The Court applied this doctrine to reject the argument that the employees' length of service regularized their employment, emphasizing that project employment legally ends upon completion of the project.
• Finality of Factual Findings of Quasi-Judicial Bodies — Factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence. The Court applied this doctrine to uphold the NLRC's findings that the employees were project employees and that an illegal strike occurred.

• "The principal test for determining whether particular employees are properly characterized as 'project employees' as distinguished from 'regular employees,' is whether or not the 'project employees' were assigned to carry out a 'specific project or undertaking,' the duration (and scope) of which were specified at the time the employees were engaged for that project."
• "By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may not expect to be employed continuously beyond the completion of the project."
• "The proviso [in the second paragraph of Art. 280] is applicable only to the employees who are deemed 'casuals' but not to the 'project' employees nor the regular employees treated in paragraph one of Art. 280."

• ALU-TUCP v. NLRC, G.R. No. 109902, August 2, 1994 — Followed. Established the two categories of project employees and articulated the principal test for determining project employment status, which the Court applied to the present case.
• Mercado, Sr. v. NLRC, G.R. No. 79869, September 5, 1991 — Followed. Held that the one-year service proviso in Article 280 applies only to casual employees, not project employees, reinforcing that length of service does not automatically regularize project employees.
• Villa v. NLRC, 348 Phil. 116 (1998) — Followed. Cited for the proposition that project employment contracts which fix the employment for a specific project remain valid under the law and are not lopsided agreements, and that the nature of employment is determined by law regardless of contract nomenclature.

• Article 280, Labor Code — Defines regular, project, seasonal, and casual employment. Applied to determine that the employees were project employees because their employment was fixed for a specific project, the completion of which was determined at the time of engagement, falling under the exception to regular employment.
• Article 263, Labor Code — Enumerates the requisites for holding a strike, including the 30-day or 15-day cooling-off period, the strike vote, and the 7-day strike ban. Applied to rule the strike illegal because the union struck on the same day it filed the notice, failing to observe the cooling-off period, and failed to conduct a strike vote.

Antonio T. Carpio (Chairperson), Diosdado M. Peralta, Roberto A. Abad, Jose Catral Mendoza