Villa vs. NLRC

Under Article 280 of the Labor Code, workers hired for a specific project or undertaking, the completion or termination of which is determined at the time of engagement, remain project employees and do not become regular employees merely because their work is necessary or desirable to the employer’s usual business, because they have rendered several years of service or successive project contracts, or because they worked alongside regular employees; the one-year service proviso applies only to casual employees.

National Steel Corporation (NSC) operated a steel manufacturing business and implemented a Five-Year Expansion Program (FYEP) covering major projects and support activities. Petitioners were workers associated with the National Steel Corporation Workers Association (NSCWA), a break-away group from the NSCEA-SPFL, who had been engaged in NSC’s project operations. The controlling statutory backdrop is Article 280 of the Labor Code, which classifies employees as regular, project, or casual, and Article 1700 of the Civil Code, which subjects labor contracts to the public interest and special labor laws. Prior litigation involving the same respondent and its FYEP workers had already addressed the status of project employees.

National Steel Corporation (NSC), one of the biggest modern steel mills in Southeast Asia, produced hot rolled products, cold rolled products, tinplates, and billets, which downstream industries transformed into truss assemblies, farm implements, pipe structures, shipbuilding and repairing materials, automotive structures and machine parts, GI roof sheets or galvanized iron, drums, nails, fasteners, and wires. NSC embarked on a Five-Year Expansion Program (FYEP), the first phase of which included the Billet Shop (1983-1985); the 5-Stand Tandem Mill, Pickling Line Revamp, Batch Annealing Furnaces and other Cold Mill Peripherals Projects (1984-1988); and the Hot Mill Revamp (1984-1987). Major preparatory, support, and post-implementation activities for 1982-1988 included site development; engineering and planning; relocation or upgrading of offices, drainages, fences, and other facilities; administrative, clerical, warehousing, and logistics support; and other support activities. The second phase was set for 1987 to 1993. The billet steelmaking plant produced steel billet, a semi-finished form of steel used as raw material by steel rerolling mills producing steel bars and wire rods; it would initially use 100% scrap and eventually, upon availability of Direct Reduced Iron (DRI), a feed mix of 20% scrap and 80% DRI.

In line with its program to use 100% scrap, NSC ventured into a shipbreaking operation in which ships or vessels at sea were cut into large chunks, brought to land, and cut further into smaller sizes. Due to scarcity of vessels or ships for salvaging, higher costs of operation, and unsuitability of raw materials, the experimental project was stopped after four or five ships had been chopped. When the project was completely phased out in November 1986, the laborers hired for it were terminated.

Prior to the phasing out of the shipbreaking project, NSC had been beset by labor problems. On May 2, 1986, the National Steel Corporation Employees Association-Southern Philippines Federation of Labor (NSCEA-SPFL) filed a notice of strike, charging NSC with unfair labor practices consisting of (a) wage discrimination, (b) interference with the employees’ right to self-organization, (c) nonregularization of contractual employees, (d) illegal termination of employees, (e) nonpayment of wage or benefit differentials, and (f) nonrecognition of NSCEA-SPFL as the sole bargaining representative. The then Ministry of Labor and Employment issued a return-to-work order dated June 17, 1986. On August 4, 1986, then Labor Minister Augusto S. Sanchez rendered a decision finding nothing in the union’s documents to support regularization; masons, carpenters, laborers, electricians, and painters could not, by the nature of their jobs, be considered regular employees under Article 281; cutters, riggers, and those assigned to other divisions were contractual employees; the short periods of hiring indicated an intent to hire on a per-project basis; and although some employees were hired for several projects, that did not make them regular. The decision nevertheless stated that contractual employees who had rendered at least one year of service, whether continuous or broken, would be considered regular contractual employees with respect to the activity to which they were assigned, and could not be removed or terminated without just cause so long as that activity existed; it found no showing that a contractual employee had worked for one year on a particular single project. NSC was directed to submit its entire pertinent records to determine regular contractual employees, if any, using Article 281 on length of service. The dispositive portion declared the expiration of contracts prior to May 13, 1986 to be in consonance with law, directed NSC to submit records, directed the parties to await the resolution of the NASEWA vs. SIMLA case, ordered priority and preference to contractual employees in hiring for project works and vacancies, and requested a 15% wage increase effective July 1, 1986.

After the denial of the motion for reconsideration, the workers filed a petition for certiorari in G.R. No. 76948, and on November 14, 1988, the Supreme Court affirmed the June 17, 1986 order assuming jurisdiction but set aside the August 4, 1986 order and remanded the case to the NLRC for a formal hearing on factual issues, including the status of the employees. The NLRC heard the case; because of delay, members of the National Steel Corporation Workers Association (NSCWA) staged a hunger strike. On March 26, 1992, the Fifth Division of the NLRC in Cagayan de Oro City found that the greater majority of the individual complainants were contractual or casual employees and, by the nature of their employment or job, could not be considered regular employees under Article 280, except a few who worked or performed functions alongside regular employees, such as those assigned at the Billeting Mill or production line departments, or who performed ground maintenance and administrative or finance support services and might deserve regularization. At the time of the May 1986 strike, the FYEP was in full blast, accounting for approximately 1,750 casual or contractual workers, which had dwindled to about one-third. The NLRC found that the expansion program consisted of numerous projects that were independently valid and legally sustainable as separate projects. During its ocular inspection on February 21, 1992, it observed that carpentry works differed from masonry and that these activities were component phases in the expansion program for constructing new buildings for new or additional machineries, offices, and other structures; after civil works came machine installations requiring technicians, engineers, and electricians; administrative support services such as checkers, timekeepers, and consulting engineers were hired during mechanical installation; additional temporary personnel were hired for dry-run operations; and the latter were usually given preference in recruitment of regular personnel. The NLRC concluded that every undertaking was divided into phases or projects whose completion was independent although interrelated, and that the temporary skilled personnel initially hired were given priority in hiring new employees or replacements, which was an exclusive management prerogative. It found that the shipbreaking operation was phased out in November 1986, prior to the termination of the first phase of the FYEP in 1987, and concluded that it was only a development project. It also found that, in compliance with the August 4, 1986 directive to give priority to contractual employees in hiring for project works, NSC re-engaged most casual workers, and that the employer’s choice of persons to hire was a management prerogative. The NLRC opined that the majority of the complainant workers were regular contractual employees under Article 280, but held that casual or temporary employees were not entitled to benefits enjoyed by regular employees other than parity on security of tenure, and deferred resolution on who among the workers might qualify or deserve regularization. Its dispositive portion adopted and sustained the August 4, 1986 decision subject to modification, declared the termination of contractual workers prior to May 13, 1986 valid, considered the greater majority of casual and temporary workers hired or rehired for specific project works or phases as regular for the duration of the period or project for which they were hired, recognized the workers’ right to form or join labor organizations, deferred final determination on regularization, granted five months’ salary as financial assistance to casual or contractual workers laid off prior to May 13, 1986 and not rehired, urged NSC to grant the 15% wage increase, and ordered priority and preference to contractual workers in hiring.

The NSCWA, a break-away group from the NSCEA-SPFL composed of 204 workers, filed a motion for reconsideration of the March 26, 1992 decision, assailing its incompleteness and failure to resolve the case with finality; Atty. Rex Fernandez filed this motion on April 6, 1992 simultaneously with a notification of revocation of the power of Atty. Dandasan as counsel of the group of 204 workers, while Atty. Dandasan, counsel of record, filed another motion for reconsideration for the 204 complainant-workers except ten who had revoked his authority. On July 6, 1992, the NLRC denied the motions for reconsideration. Thereafter, Atty. Fernandez filed a motion praying for the inclusion of the 204 complainant-workers in the list of employees whose employment status should be determined. These workers alleged that their contracts of employment did not tell the real story because, having been prepared by management, they were contracts of adhesion that should be construed against management; pressed by financial necessities, they agreed to contracts even though some specified employment for only five or six months. They asserted that NSC’s brochure belied the contention that shipbreaking was only a developmental project, and that the project was phased out for no other reason than mismanagement or shortsightedness of its conceivers. The NSCWA also filed a motion to declare the 204 complainant-workers as regular employees, asserting that, except for the packers, they were employed at the billet steelmaking plant under different positions and departments, namely, the general plant facilities, the steel fabrication shop, the shipbreaking operations, and the raw material operations, all of which were engaged in common, constant, and everyday activities in NSC’s customary trade or business. The post-arbitration proceedings were marred by efforts of both parties to becloud the issue of regularization; the NSCWA tried to have its members’ claims decided separately and ahead of other workers, and its counsel sought the inhibition of Commissioner Musib M. Buat, who had already given way to Commissioner Leon G. Gonzaga, Jr. for the study of the case and preparation of the resolution; other incidental matters included a motion for inhibition filed by Labor Arbiter Alex A. Muyco. In the end, only the NSCWA and NSC filed their respective memoranda; Atty. Gregorio A. Pizarro, counsel of the NSCEA-SPFL, and Atty. Isaac Dandasan, counsel of 72 of the 204 splinter group, did not submit memoranda. On April 14, 1994, the NLRC ruled that the project employees were not regular employees within the purview of Article 280. Focusing on the shipbreaking operation, it found that although shipbreaking was not part of the major programs designated under FYEP I and FYEP II, it was envisioned as a component of the billet shop, a totally new installation; NSC ventured into shipbreaking in a developmental way and hired inexperienced labor under a contract; after chopping four or five ships, there was no more supply of ships, so NSC stopped shipbreaking and instead bought hot breakative iron from Malaysia and scrap materials from local scrap dealers to feed the billet shop; the shipbreaking operation was a developmental program that had long been phased out due to non-viability; the employees assigned there were project employees and those dismissed were not entitled to reinstatement; and requiring reactivation or reopening of the shipbreaking program would result in ignorance, grave abuse of discretion, or interference in management business, judgment, and prerogatives. The NLRC noted that, given the immensity of NSC’s operations, project employees could work alongside regular employees, but such a situation did not imply that a contract worker hired under the FYEP, for peak load, or as a temporary replacement of a regular employee on leave would be converted into a regular employee. Its April 14, 1994 resolution affirmed the March 26, 1992 decision with modifications: claims for regularization by complainants in Tables A, C, and E were dismissed as moot and academic; complainants in Table B were directed to pursue appropriate remedies in the already decided NASEWA vs. SIMLA and NSC cases; consolidated pending appealed cases of original complainants in Table F involving different or new causes of action were excluded for separate resolution; and the remaining majority of complainants in Tables D and G were declared contractual, seasonal, or project employees and granted separation pay or financial assistance as applicable. On August 5, 1994, the NLRC denied the motion for reconsideration, reiterating that the shipbreaking operation was a developmental project phased out due to non-viability; that NSC undertook major projects, special projects, and other major preparatory, support, and post-implementation activities under FYEP I (1982-1988) and FYEP II (1989-1994); that these expansion programs involved area or land operation, construction of buildings, installation of equipment, dry-run of machineries, and acceptance; that contractual or project workers were hired in addition to fifteen other private contractors; that because complainants’ services were needed only when there were tasks to be performed, they could not be considered regular employees but could be categorized as regular contractual employees; that hiring on a contract or project basis was valid and legal; that more than 2,000 contract workers were employed when the FYEP started, and as projects were completed NSC had reason to reduce its contractual workforce; and that requiring NSC to employ and pay complainants even without major or special project works, or to continue FYEP III, would be unwise, unjust, and an encroachment on management prerogatives. On September 23, 1994, petitioners led by Felix Villa filed the instant petition for certiorari.

• Contract of Adhesion and Vice of Consent: Petitioners asserted that the contracts each executed with NSC “does not mean anything” because they were prepared by management, which stood on a higher footing; their need for employment came from vital and even desperate necessity, and under the forceful intimidation of urgent need they could not have agreed freely and voluntarily, resulting in a vice of consent. They also claimed that rehired workers after May 13, 1986 were given gate passes instead of contracts.
• Actual Work and Mainstream Business: Petitioners maintained that job designations in their contracts did not reflect the actual work they performed, and that they were made to work in line departments and in NSC’s mainstream business of producing steel products rather than in expansion projects. They asserted that, except for packers, they were employed at the billet steelmaking plant under different positions and departments—general plant facilities, steel fabrication shop, shipbreaking operations, and raw material operations—all engaged in common, constant, and everyday activities in NSC’s customary trade or business.
• Shipbreaking as Regular Activity: Petitioners argued that NSC’s brochure belied the claim that shipbreaking was only a developmental project, and that the project was phased out due to mismanagement or shortsightedness of its conceivers; therefore, those working under the shipbreaking project should be considered regular employees.
• Repeated Contract Renewals: Citing Beta Electric Corporation vs. NLRC, petitioners alleged that repeated renewal of contracts, including renewal before expiration of the last contract, circumvents the law and is not determinative of whether a worker is regular.
• Article 280’s “Notwithstanding” Clause: Petitioners asserted that the word “notwithstanding” in Article 280’s phrase “(t)he provisions of written agreements to the contrary notwithstanding and regardless of the oral agreement of the parties” implies that the contracts they entered into were not valid.
• Grave Abuse of Discretion and Procedural Failures: Petitioners claimed that the NLRC committed grave abuse of discretion when it ignored the Billet Steel Plant brochure, found them not regular contrary to the guidelines the NLRC itself set, failed to comply with the Supreme Court’s order to pass upon whether petitioners defied the return-to-work order or NSC locked out returning workers, included Ireneo Alibangbang in Table “B” of the April 14, 1994 resolution in the SIMLA case, and considered moot and academic the claims of those who died during the proceedings. They sought a ruling that they were regular employees entitled to reinstatement with backwages.
• Termination by Ferraren Memorandum: Petitioners alleged that the employment of most of them was terminated through a memorandum of a certain Ferraren who, after calling their attention to a cutting off of oxygen supply incident, promised them reemployment after twenty days, which was never realized.

• Project Employment: NSC maintained that the workers were contractual or project employees hired for specific projects or phases of the FYEP, including the shipbreaking operation, and not regular employees under Article 280.
• Nature of Services: NSC argued that the casual workers performed services only for the expansion program, or as substitutes for those who were absent or on official leave, or as additional hands to cope with an abrupt or predetermined business peak.
• Shipbreaking as Developmental Project: NSC contended that shipbreaking was a developmental project that was phased out due to non-viability after four or five ships were chopped and no more supply of ships was available; it then bought hot breakative iron from Malaysia and scrap from local dealers to feed the billet shop.
• Management Prerogative: NSC argued that the choice of persons to hire and the reduction of the contractual workforce upon completion of projects were management prerogatives, and that requiring it to continue employment or proceed with FYEP III would encroach on those prerogatives.
• Compliance with NLRC Directives: NSC manifested that it had already complied with paragraphs 6 and 7 of the March 26, 1992 dispositive orders, which the NLRC noted as proof of compliance.

• Shipbreaking Brochure: Whether the NLRC committed grave abuse of discretion when it ignored the brochure of the Billet Steel Plant issued by NSC in finding that petitioners working under the shipbreaking project were not regular employees because shipbreaking was a developmental project.
• Basic Guidelines: Whether the NLRC committed grave abuse of discretion when it found petitioners not regular employees contrary to the basic guidelines which the NLRC itself set.
• Remand Compliance: Whether the NLRC committed grave abuse of discretion when it did not comply with the Supreme Court’s order to pass upon whether petitioners defied the return-to-work order or NSC locked out returning workers.
• Inclusion in SIMLA Case: Whether the NLRC committed grave abuse of discretion when it included Ireneo Alibangbang in the list of complainants in the SIMLA case in Table “B” of the April 14, 1994 resolution.
• Moot Claims: Whether the NLRC committed grave abuse of discretion when it considered moot and academic the claims of those who died during the proceedings.
• Regular Employment and Reinstatement: Whether petitioners are regular employees of NSC and should be reinstated with backwages.

• Shipbreaking Brochure: No. The NLRC did not gravely abuse its discretion in finding that the shipbreaking operation was a developmental project and that petitioners assigned to it were project employees, not regular employees under Article 280.
• Basic Guidelines: No. The NLRC’s finding that petitioners were project employees was consistent with Article 280 and jurisprudence; length of service is not the controlling determinant of project employment, and the one-year service proviso applies only to casual employees.
• Remand Compliance: No. The petition was dismissed, and the challenged NLRC resolutions were affirmed; no grave abuse of discretion was found as to the procedural matters raised.
• Inclusion in SIMLA Case: No. The petition was dismissed, and the challenged NLRC resolutions were affirmed; no grave abuse of discretion was found as to the inclusion of Ireneo Alibangbang in Table “B.”
• Moot Claims: No. The petition was dismissed, and the challenged NLRC resolutions were affirmed; no grave abuse of discretion was found as to the treatment of the claims of those who died during the proceedings.
• Regular Employment and Reinstatement: No. Petitioners remained project employees under Article 280; their services were coterminous with the projects for which they were hired, and they were not entitled to reinstatement or backwages as regular employees.

• Shipbreaking Brochure: The Court relied on the NLRC’s factual finding, supported by substantial evidence, that shipbreaking was a developmental project, not part of the major programs under FYEP I and II, envisioned as a component of the billet shop, and phased out due to non-viability after four or five ships were chopped. The NLRC found that NSC hired inexperienced labor under contract for the operation, and that after the supply of ships ran out NSC bought hot breakative iron from Malaysia and scrap from local dealers to feed the billet shop. The Court held that the NLRC’s finding that employees assigned to shipbreaking were project employees was in accord with Mercado, Sr. vs. NLRC and Phil. Jai Alai and Amusement Corp. vs. Calve, and that requiring reactivation of the phased-out project would interfere with management prerogatives.
• Basic Guidelines: Article 280 classifies employees as regular, project, or casual. A regular employee is one engaged to perform activities usually necessary or desirable in the usual business or trade of the employer, except where employment is fixed for a specific project or undertaking whose completion or termination is determined at the time of engagement, or where the work is seasonal. Project employment contracts are valid; the employee is deemed to understand that employment is coterminous with the project and may not expect continuous employment beyond its completion. The nature of employment is determined by law regardless of any contract to the contrary, because labor contracts are imbued with public interest and subject to the police power of the State under Article 1700 of the Civil Code. However, the fact that project employees perform services necessary or desirable to the employer’s business, or that they have worked for several years under successive project contracts, does not convert them into regular employees. Length of service is not the controlling determinant of project employment. The one-year service proviso in Article 280 applies only to casual employees, not project employees. Applying these rules, the NLRC correctly found that petitioners were project employees hired for NSC’s FYEP and shipbreaking projects, and the Court affirmed.
• Remand Compliance: The text does not set out a separate ratio for this issue; the petition was denied and the challenged NLRC resolutions were affirmed.
• Inclusion in SIMLA Case: The text does not set out a separate ratio for this issue; the petition was denied and the challenged NLRC resolutions were affirmed.
• Moot Claims: The text does not set out a separate ratio for this issue; the petition was denied and the challenged NLRC resolutions were affirmed.
• Regular Employment and Reinstatement: The Court held that petitioners remained project employees regardless of the number of projects in which they had worked. It cited ALU-TUCP vs. NLRC, which distinguished project from regular employees and classified NSC’s FYEP as a project not within NSC’s regular business: NSC was not in the business of constructing buildings or installing plant machinery for third parties, and each component project began and ended at specified times determined when the workers were engaged. It also cited Palomares vs. NLRC, involving the same respondent and FYEP workers, where the Court ruled that services necessary or desirable for a specified duration did not impair the validity of fixed-duration contracts, and that work under different project employment contracts for several years did not make the workers regular. Mercado, Sr. vs. NLRC was cited for the rule that the one-year service proviso relates only to casual employees. Because petitioners were project employees, their employment terminated upon completion of the projects, and they were not entitled to reinstatement or backwages as regular employees.

• Project Employment under Article 280 — Article 280 of the Labor Code classifies employees into regular, project, and casual. Regular employees are engaged to perform activities usually necessary or desirable in the usual business or trade of the employer, except where employment is fixed for a specific project or undertaking whose completion or termination is determined at the time of engagement, or where the work is seasonal. Project employees’ services are coterminous with the project; they may not expect continuous employment beyond its completion. The nature of employment is determined by law regardless of any contrary contract. In this case, NSC workers hired for FYEP and shipbreaking were project employees, not regular, despite the necessary or desirable nature of their work and their length of service.
• Length of Service Not Controlling for Project Employees — For project employees, length of service is not the controlling determinant of employment tenure. Work under successive project contracts for several years does not convert a project employee into a regular employee. The one-year service proviso in Article 280 applies only to casual employees. The Court applied this to reject petitioners’ claim that their years of service made them regular.
• Two Kinds of Projects — A project may be (a) a particular job or undertaking within the regular or usual business of the employer, but distinct, separate, and identifiable from the employer’s other undertakings; or (b) a particular job or undertaking not within the regular business of the corporation, identifiably separate and distinct from its ordinary or regular business operations, and beginning and ending at determined or determinable times. NSC’s FYEP projects fell under the second type because NSC was not in the business of constructing buildings or installing plant machinery for third parties, and each component project had specified start and end times determined at engagement.
• Validity of Project Employment Contracts — Project employment contracts are valid. An employee who enters such a contract is deemed to understand that employment is coterminous with the project and may not expect continuous employment beyond its completion. Labor contracts are not ordinary contracts; they are imbued with public interest and subject to the police power of the State, and Article 1700 of the Civil Code provides that labor contracts must yield to the common good. The Court applied this to uphold the contracts despite petitioners’ claims of adhesion and vice of consent.
• Management Prerogative to Reduce Workforce and Refuse Project Reactivation — An employer may reduce its workforce upon completion or proximate accomplishment of a project. The Court upheld the NLRC’s refusal to require NSC to reactivate the phased-out shipbreaking operation or continue FYEP III, as that would interfere with management business judgment and prerogatives.
• Respect for NLRC Factual Findings — Findings of labor administrative tribunals like the NLRC, which have acquired expertise in specific matters, are generally accorded respect and even finality if supported by substantial evidence. The exception is a clear, palpable, and demonstrable mistake needing rectification. The Court found no such mistake in the NLRC’s finding that petitioners were project employees.

• "Contracts for project employment are valid under the law. 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." — This passage states the core rule validating project employment contracts and defining the employee’s expectation of tenure as coterminous with the project.
• "The fact that petitioners were required to render services necessary or desirable in the operation of NSC's business for a specified duration did not in any way impair the validity of their contracts of employment which stipulated a fixed duration therefor." — This is the ratio decidendi adopted from Palomares vs. NLRC, rejecting the claim that performance of necessary or desirable services for a fixed period converts project employees into regular employees.
• "Length of service is not the controlling determinant of the employment tenure of a project employee." — This is the Court’s canonical formulation of the rule that years of service do not make a project employee regular.
• "In the case of Mercado, Sr. v. NLRC, this Court ruled that the proviso in the second paragraph of Article 280, providing that an employee who has served for at least one year, shall be considered a regular employees, relates only to casual employees and not to project employees." — This passage defines the limited scope of the one-year service proviso and is frequently cited for the distinction between casual and project employees.

• ALU-TUCP vs. NLRC, G.R. No. 109902, August 2, 1994, 234 SCRA 678 — Controlling precedent. The Court distinguished project employees from regular employees and set out two kinds of projects. It classified NSC’s FYEP I and II as projects of the second type—not within NSC’s regular business—because NSC did not hold itself out as a construction or engineering company for third parties, and each component project began and ended at specified times.
• Palomares vs. NLRC, G.R. No. 120064, August 15, 1997 — Followed. Involving the same respondent and workers engaged in FYEP I and II, the Court ruled that requiring services necessary or desirable to NSC’s business for a specified duration did not impair the validity of fixed-duration employment contracts, and that work under different project employment contracts for several years did not make the workers regular.
• Mercado, Sr. vs. NLRC, 201 SCRA 332 (1991) — Followed. The Court ruled that the proviso in the second paragraph of Article 280, providing that an employee who has served at least one year shall be considered a regular employee, relates only to casual employees and not to project employees.
• Phil. Jai Alai and Amusement Corp. vs. Calve, 126 SCRA 299 — Cited by the NLRC and affirmed by the Court for the rule that dismissed project employees are not entitled to reinstatement.
• Beta Electric Corporation vs. NLRC, G.R. No. 86408, February 15, 1990, 182 SCRA 384 — Cited by petitioners for the argument that repeated renewal of contracts circumvents the law and is not determinative of regular employment. The Court did not adopt this as a ground to convert the NSC project workers into regular employees.
• Militante vs. NLRC, 316 Phil. 441, 453 (1995) — Cited for the rule that findings of labor administrative tribunals supported by substantial evidence are generally accorded respect and finality.
• International School of Speech vs. NLRC, 312 Phil. 454, 462 (1995) — Cited for the exception that a palpable and demonstrable mistake by a quasi-administrative tribunal may be rectified.
• Archbuild Masters and Construction, Inc. vs. NLRC, G.R. No. 108142, December 26, 1995, 251 SCRA 483, 489-490 — Cited for the rule that an employer may reduce its workforce upon completion or proximate accomplishment of a project.
• Phesco, Inc. vs. NLRC, G.R. No. 104444-49, December 27, 1994, 239 SCRA 446, 449-450, citing Capitol Industrial Construction Groups vs. NLRC, G.R. No. 105359, April 22, 1993, 221 SCRA 469 — Cited for the rule that if employees’ services are extended long after the supposed project had been completed, they are removed from the scope of project employees and considered regular employees.
• The Conference of Maritime Manning Agencies, Inc. vs. POEA, 313 Phil. 592 (1995) — Cited for the rule that labor contracts are not ordinary contracts but are imbued with public interest and subject to the police power of the State.

• Article 280, Labor Code — Defines regular, project, and casual employees. The Court quoted it and applied it to hold that petitioners were project employees, not regular employees, because their employment was fixed for specific projects or undertakings whose completion or termination was determined at the time of engagement. The one-year service proviso applies only to casual employees.
• Article 1700, Civil Code — Provides that relations between capital and labor are not merely contractual, are impressed with public interest, and labor contracts must yield to the common good and are subject to special labor laws. The Court cited it to explain that the nature of employment is determined by law regardless of any contrary contract, while still upholding the validity of project employment contracts.
• Article 281, Labor Code (as cited in the August 4, 1986 decision; now Article 280) — The August 4, 1986 decision referred to Article 281 in ruling on regularization and length of service. The NLRC later referred to Article 280 (formerly 281). The Court applied Article 280.

Narvasa C.J., Melo, Francisco and Panganiban, JJ., concur.