Steelweld Construction vs. Echano

A motion for reconsideration is a condition sine qua non to the filing of a petition for certiorari under Rule 65, but the requirement may be dispensed with when the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court, making a further motion futile.

Steelweld Construction, a corporation engaged in the construction business, hired Serafin H. Echano as a carpenter and bodegero, Renato L. Salazar as a painter, and Roberto E. Copillo as a painter, for various construction projects over a period spanning 2001 to 2009. Echano contracted tuberculosis in January 2009, was placed on successive sick leaves, and when he reported back with a fit-to-work medical certificate on November 13, 2009, he was no longer allowed to return. Salazar, together with co-workers, wrote management on June 28, 2009, demanding better working conditions and payment of benefits; he was terminated on December 4, 2009. Copillo received a Notice to Explain on November 12, 2009, regarding a paint color mistake, and was barred from the premises on December 12, 2009. On February 16, 2010, they jointly filed complaints for illegal dismissal and money claims.

Nature of Engagement: Respondents Echano, Salazar, and Copillo were engaged by petitioner Steelweld Construction as a carpenter/bodegero and painters, respectively, continuously working on various construction projects of the company for several years: Echano from 2006 to 2009 (3 years), Salazar from 2005 to 2009 (4 years), and Copillo from 2001 to 2009 (8 years). They were never required to execute new employment contracts for each project assignment. Petitioners claimed respondents were project employees whose services ended upon project completion but presented only unsigned employment contracts as proof. No termination reports were filed with the DOLE upon the supposed completion of projects.

Termination Circumstances:

• Echano: In January 2009, he was diagnosed with tuberculosis and ordered by petitioners to take a leave of absence. He complied and after three months of treatment returned, but was again ordered to take a second three-month sick leave. On November 13, 2009, he reported back with a medical certificate of fitness to work, but petitioners refused to take him back. Petitioners later claimed he abandoned his employment.
• Salazar: On June 28, 2009, he and co-workers wrote petitioners to demand better working conditions. On December 4, 2009, he was terminated. Petitioners asserted the project he was assigned to—Patio Rosario Townhomes—was nearly complete, but offered no evidence of the completion or its phase.
• Copillo: He also joined the June 28, 2009 demand letter. On November 12, 2009, he received a Notice to Explain regarding a violation of company rules, but the notice did not specify the rules violated. Petitioners cited his use of the wrong paint color on Unit 33 of Patio Rosario Townhomes as negligence, and alleged other complaints about poor performance. Copillo admitted the single mistake, claiming no instruction on the correct color was given. He had no record of unsatisfactory performance in eight years. On December 12, 2009, he was barred from company premises.

Petitioners’ Defenses: Petitioners maintained that respondents were project employees, and their terminations were justified: Echano for abandonment after medical leave, Salazar due to project completion, and Copillo for gross and habitual negligence. They claimed all wages and benefits were paid, but asserted that payrolls and pay slips were destroyed by typhoon Ondoy in September 2009.

• Procedural — Motion for Reconsideration: Petitioners argued that their former counsel’s negligence caused the failure to file a motion for reconsideration of the NLRC resolution, which should excuse the procedural defect and allow the Court of Appeals to entertain the petition for certiorari.
• Nature of Employment: Petitioners maintained that respondents were project employees, hired for specific construction projects whose completion terminated the employment relationship.
• Validity of Dismissal: Petitioners contended that Echano abandoned his job after failing to report back upon the expiration of his medical leave; Salazar’s services were validly terminated because the project he worked on was nearing completion; and Copillo was dismissed for cause due to gross and habitual neglect of duties, as evidenced by the paint color mistake and other complaints.
• Money Claims: Petitioners asserted that all compensation and benefits due were paid, and the absence of payroll records was justified by the destruction of documents during typhoon Ondoy.

• Procedural — Motion for Reconsideration: Respondents countered that the petition for certiorari was properly dismissed because a motion for reconsideration is an indispensable prerequisite under Rule 65, and no compelling reason existed to dispense with it.
• Regular Employment: Respondents argued they were regular employees because they performed tasks necessary and desirable to Steelweld’s construction business for continuous periods exceeding one year, without being informed at hiring of any specific project or undertaking and its duration.
• Illegal Dismissal: Respondents maintained that Echano did not abandon his employment; he reported back with a medical certificate and was refused re-employment. Salazar was terminated without proof of project completion. Copillo’s single infraction was neither gross nor habitual, and no evidence of other complaints was presented. In all cases, the dismissals lacked just cause and due process.

• Procedural — Motion for Reconsideration: Whether the failure to file a motion for reconsideration of the NLRC resolution before filing a petition for certiorari under Rule 65 is fatal, or whether the circumstances warrant relaxation of the rule.
• Regular vs. Project Employment: Whether respondents were project employees or regular employees of Steelweld Construction.
• Illegal Dismissal: Whether respondents Echano, Salazar, and Copillo were illegally dismissed.
• Monetary Awards: Whether the award of 13th month pay, its reckoning period, and the solidary liability of the individual petitioners were proper.

• Procedural — Motion for Reconsideration: The direct filing of the petition for certiorari was excused. A motion for reconsideration is a condition sine qua non under Rule 65, but the recognized exception where the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court was applicable. The NLRC had exhaustively resolved the identical issues of employment status and validity of dismissal, making a further motion futile. Counsel’s negligence was not a valid ground, but the second exception in Abraham v. NLRC saved the petition. The case was resolved on the merits to avoid further delay of eleven years.
• Regular vs. Project Employment: Respondents were regular employees, not project employees. The principal test for project employment—whether the employee was assigned to a specific project or undertaking and informed of its duration and scope at the time of engagement—was not satisfied. The unsigned employment contracts had no probative value, and petitioners did not report project completions to DOLE under Department Order No. 19, a violation indicating regular employment. Moreover, respondents had rendered continuous service of more than one year performing tasks necessary or desirable to Steelweld’s business, thus attaining regular status under Article 295 of the Labor Code.
• Illegal Dismissal: All three respondents were illegally dismissed. Echano’s abandonment was unproven; he sought to return to work with a fit-to-work certificate but was turned away, and the filing of his complaint negated any intent to sever the relationship. No notices of abandonment or dismissal were sent. Salazar’s termination for project completion lacked evidentiary support. Copillo’s single mistake in using the wrong paint color did not constitute gross and habitual negligence; his eight-year record was satisfactory. For an isolated error, dismissal was disproportionate.
• Monetary Awards: The award of 13th month pay was affirmed but modified: applying the three-year prescriptive period, it should be computed from February 16, 2007 (three years before the complaint) up to each respondent’s dismissal date. Reinstatement was no longer feasible due to strained relations and the passage of eleven years; separation pay of one month per year of service in lieu of reinstatement was ordered, plus full backwages. Individual petitioners Joven Sta. Ana and Josephine Sta. Ana were not held solidarily liable absent proof of bad faith. Six percent legal interest per annum from finality until fully paid was imposed.

• Motion for Reconsideration as Condition Sine Qua Non for Certiorari — A special civil action for certiorari under Rule 65 requires a prior motion for reconsideration from the tribunal that issued the assailed order, unless one of the recognized exceptions applies. Among these exceptions is when the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court, making a further motion futile. Here, the NLRC had exhaustively passed upon the issues; the petition was reinstated.
• Test for Project Employment — A project employee is one assigned to a specific project or undertaking whose duration or scope was specified at the time of engagement. The employer must inform the employee of this status and the project’s duration at hiring. The absence of signed employment contracts containing such specifications, coupled with the employer’s failure to file termination reports with the DOLE under Department Order No. 19 upon project completion, strongly indicates that the employees are regular, not project, employees. (Applied: No valid notice or contracts; DOLE reports absent.)
• Regular Employment by Length of Service — Under Article 295 of the Labor Code, an employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity for which employed, is deemed a regular employee whose employment continues while such activity exists. (Applied: Respondents continuously worked from three to eight years performing construction tasks.)
• Abandonment Requires Deliberate and Unjustified Refusal — Abandonment consists of (a) failure to report for work without valid reason, and (b) a clear intention to sever the employer-employee relationship shown by overt acts. Filing an illegal dismissal complaint is inconsistent with abandonment. (Applied: Echano reported back and filed a complaint.)
• Gross and Habitual Negligence as Ground for Dismissal — Negligence must be both gross and habitual to justify dismissal; an isolated or minor infraction is insufficient. (Applied: Copillo’s single mistake in paint color did not meet the standard.)

• “A special civil action for certiorari under Rule 65 of the Rules of Court is an extraordinary remedy which can only be availed of when there is no appeal or any plain, speedy, or adequate remedy available in the ordinary course of law. It is settled that a motion for reconsideration is a plain, speedy, and adequate remedy which should be resorted to before one may avail of the extraordinary remedy of certiorari.” — Reiterating the indispensable prerequisite.
• “A project employee is assigned to a project that starts and ends at a determined or determinable time. The principal test to determine if employees are project employees is whether they have been assigned to carry out a specific project or undertaking, the duration or scope of which was specified at the time the employees were engaged for that project.” — Defining the core test.
• “The absence of the employment contracts puts into serious question the issue of whether the employees were properly informed of their employment status as project employees at the time of their engagement, especially if there were no other evidence offered.” — From Mirandilla v. Jose Calma Development Corp., quoted with approval.
• “Abandonment requires the deliberate and unjustified refusal of the employee to perform his employment responsibilities. Mere absence or failure to work, even after notice to return, is not tantamount to abandonment.” — On the high evidentiary bar for abandonment.

• Abraham v. NLRC, 406 Phil. 310 (2001) — Followed. Held that where issues had been fully passed upon by the NLRC, a motion for reconsideration is futile, and a petition for certiorari may be entertained despite its absence.
• Inocentes, Jr. v. R. Syjuco Construction, Inc., G.R. No. 240549, August 27, 2020 — Followed. Reiterated that to determine project employment, the employer must prove the employee was informed of the specific project and its duration at the time of hiring.
• Mirandilla v. Jose Calma Development Corp., G.R. No. 242834, June 26, 2019 — Followed. Unsigned employment contracts and lack of evidence of notice of project duration weigh against project employment.
• Freyssinet Filipinas Corp. v. Lapuz, G.R. No. 226722, March 18, 2019 — Followed. Failure to file termination reports with DOLE indicates that workers are not project employees but regular ones.
• University of Santo Tomas v. Samahang Manggagawa ng UST, 809 Phil. 212 (2017) — Followed. Continuously re-hired workers performing necessary tasks for more than one year are deemed regular employees.

• Article 295 (formerly Article 280), Labor Code of the Philippines — Defines regular and casual employment. Applied to classify respondents as regular employees: they performed tasks necessary to Steelweld’s business for more than one year without valid project employment contracts.
• Department Order No. 19, Department of Labor and Employment — Requires employers to report project completions. Violation of this requirement was treated as an indicator that respondents were not project employees.
• Section 1, Rule 65, Rules of Court — Governs the special civil action for certiorari. The requirement of a prior motion for reconsideration was relaxed under a recognized exception.

Gesmundo, C.J. (Chairperson), Caguioa, M. Lopez, and J. Lopez, JJ., concurred.