Bajaro vs. Metro Stonerich Corp.

G.R. No. 227982, 23 April 2018

Facts of the case:

Metro Stonerich is a domestic entity engaged in the construction business. Bajaro was hired by Metro Stonerich as a concrete pump operator, tasked with operating the pouring of freshly mixed concrete on the latter's construction projects. He was assigned in various construction projects. Bajaro suffered an injury and seek financial help to Metro Stonerich but the latter refused to pay for his medical expenses. So he went to a hospital to have himself treated. When he fully recovered after two weeks and was issued a Certificate that he was fit to return to work, He went back at his work place but was informed to return to work the next day. However, he was informed that he should no longer report for work. Instead, he was offered money in lieu of his employment. He did not accept the money.

In his position paper, Bajaro asserted that he was a regular employee of Metro Stonerich, as he was continuously employed for six years and performed activities that were necessary and desirable to the latter's usual business. He likewise claimed that he was entitled to his monetary benefits. On the other hand, Metro Stonerich argued that Bajaro is a project employee stating that Bajaro was hired for 5 different construction projects, with each project lasting for a period of 5 months or 12 months. As proof that Bajaro was engaged on a per project basis, Metro Stonerich pointed out that it even submitted reports to the DOLE upon the completion of the projects Bajaro was engaged in. As to Bajaro’s monetary claim, Metro Stonerich countered that he was given the monetary benefits due him as shown in its accounting ledgers.

The Labor Arbiter (LA) dismissed Bajaro's complaint for illegal dismissal. The LA held that Bajaro was a project employee, as evidenced by the employment contracts he signed each time he was engaged by Metro Stonerich. Each contract clearly indicated the specific project, as well as the duration of his work. As a project employee, his employment was coterminous with each project. As for Bajaro's money claims, the LA awarded a total overtime pay differential of Php 14,921.10. Also, the LA awarded Php 4,333.30 as proportionate l3^th month pay for 2014, and Php 7,500.00, as SIL pay equivalent to 15 days. The NLRC dismissed Bajaro’s appeal. The NLRC rejected Bajaro's claim that his continued and repeated rehiring made him a regular employee. The CA, likewise dismissed the petition of petitioner on the ground that the NLRC did not commit any grave abuse of discretion to warrant the nullification of its decision. The CA likewise affirmed the benefits awarded by the LA and the NLRC.

Issue:

Whether or not petitioner is a regular employee.

Ruling of the Court:

Petitioner is a project employee

In a project-based employment, the employee is assigned to a particular project or phase, which begins and ends at a determined or determinable time. Consequently, the services of the project employee may be lawfully terminated upon the completion of such project or phase. For employment to be regarded as project-based, it is incumbent upon the employer to prove that (i) the employee was hired to carry out a specific project or undertaking; and (ii) the employee was notified of the duration and scope of the project. In order to safeguard the rights of workers against the arbitrary use of the word "project" as a means to prevent employees from attaining regular status, employers must prove that the duration and scope of the employment were specified at the time the employees were engaged, and prove the existence of the project.

In the case at bar, Bajaro was hired by Metro Stonerich as a concrete pump operator in five different construction projects. It is undisputed that Bajaro was adequately informed of his employment status (as a project employee) at the time of his engagement. This is clearly substantiated by his employment contracts (Kasunduan Para sa Katungkulang Serbisyo (Pamproyekto), stating that: (i) he was hired as a project employee; and (ii) his employment was for the indicated starting dates therein, and will end on the completion of the project. The said contracts that he signed sufficiently apprised him that his security of tenure with Metro Stonerich would only last as long as the specific phase for which he was assigned. In fact, the target date of completion was even indicated in each individual contract clearly warning him of the period of his employment.

Furthermore, pursuant to Department Order No. 19, Series of 1993, or the "Guidelines Governing the Employment of Workers in the Construction Industry," Metro Stonerich duly submitted the required Establishment Employment Report on April 23, 2014 to the DOLE for the reduction of its workforce. Bajaro was included among the 10 workers reported for termination as a consequence of the completion of the construction project effective May 23, 2014. As aptly pointed out by the CA, the submission of the said Establishment Employment Report is a clear indication of project employment.

Verily, being a project employee, Metro Stonerich was justified in terminating Bajaro's employment upon the completion of the project for which the latter was hired.

A project employee's length of service and repeated re-hiring constitute an unfair yardstick for determining regular employment in the construction industry

Accordingly, it is not uncommon for a construction firm to hire project employees to perform work necessary and vital for its business. Suffice it to say, in William Uy Construction Corp. and/or Uy, et al. v. Trinidad, the Court acknowledged the unique characteristic of the construction industry and emphasized that the laborer's performance of work that is necessary and vital to the employer's construction business, and the former's repeated rehiring, do not automatically lead to regularization, viz.:

Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if applied to the construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project. And getting projects is not a matter of course. Construction companies have no control over the decisions and resources of project proponents or owners. There is no construction company that does not wish it has such control but the reality, understood by construction workers, is that work depended on decisions and developments over which construction companies have no say.

For this reason, the Court held in Caseres v. Universal Robina Sugar Milling Corporation that the repeated and successive rehiring of project employees do not qualify them as regular employees, as length of service is not the controlling determinant of the employment tenure of a project employee, but whether the employment has been fixed for a specific project or undertaking, its completion has been determined at the time of the engagement of the employee.

Accordingly, it is all too apparent that the employee's length of service and repeated re-hiring constitute an unfair yardstick for determining regular employment in the construction industry. Thus, Bajaro's rendition of six years of service, and his repeated re-hiring are not badges of regularization.

Petitioner is entitled to his money benefits

Although Bajaro was hired as a project employee, he is still entitled to certain benefits under the law. Particularly, Bajaro is bound to receive overtime pay differentials, SIL pay, and proportionate 13^th month pay, with attorney's fees equivalent to 10% of the total monetary award.

Specifically, as for Bajaro's overtime pay, the records show that Bajaro rendered 531 hours of overtime work. Pursuant to Article 87 of the Labor Code, Bajaro is entitled to receive an additional compensation equivalent to 25% of his daily wage of Php 500.00 for every hour of overtime work he rendered. Unfortunately however, Bajaro merely received a meager overtime pay of Php 50.00. Thus, the Court agrees with the LA's conclusion that Bajaro is entitled to an overtime pay differential.

Additionally, Metro Stonerich failed to prove that it paid Bajaro his SIL pay. Notably, Article 95 of the Labor Code states that "every employee who has rendered at least one year of service shall be entitled to a yearly SIL of five days with pay." Metro Stonerich failed to prove that it gave Bajaro his SIL pay. It must be noted that in claims for payment of salary differential, SIL, holiday pay and 13^th month pay, the burden rests on the employer to prove payment. This standard follows the basic rule that in all illegal dismissal cases the burden rests on the defendant to prove payment rather than on the plaintiff to prove non-payment. This likewise stems from the fact that all pertinent personnel files, payrolls, records, remittances and other similar documents - which will show that the differentials, SIL and other claims of workers have been paid - are not in the possession of the worker but are in the custody and control of the employer.

Likewise, Bajaro is entitled to receive his proportionate 13^th month pay corresponding to January 2014 to April 22, 2014.

In addition, Bajaro should be awarded attorney's fees equivalent to 10% of the total monetary award, as the instant case includes a claim for unlawfully withheld wages. Added to this, all amounts due shall earn a legal interest of six percent (6%) per annum.

On the other hand, Bajaro's claims for premium pay for holiday and rest day are denied for lack of factual basis, due to Bajaro's failure to specify the dates that he worked during special days, or rest days. It bears stressing that premium pays for holidays and rest days, are not usually incurred in the normal course of business. As such, the burden is shifted on the employee to prove that he actually rendered service on holidays and rest days.

In fine the Court affirms the right of an employer to hire project employees, for as long as the latter are sufficiently apprised of the nature and terms of their employment. Metro Stonerich was not remiss in informing Bajaro of his limited tenure as a project employee. Accordingly, being a project employee, Bajaro was validly terminated from employment due to the completion of the project in which he was engaged.

Good notes on this case

- In view of the distinct nature of the construction industry, the Court recognizes the right of an employer to hire a construction worker for a specific project, provided that the latter is sufficiently apprised of the duration and scope of such undertaking. In this instance, the worker's tenure shall be coterminous with the project. Notably, the employee's performance of work that is necessary and desirable to the construction business, as well as his repeated rehiring, do not bestow upon him regular employment status.

- Remarkably, in Gadia, et al. v. Sykes Asia, Inc., et al., the Court explained that the "projects" wherein the project employee is hired may consist of "(i) a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company; or (ii) a particular job or undertaking that is not within the regular business of the corporation."

- Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if applied to the construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project. And getting projects is not a matter of course. Construction companies have no control over the decisions and resources of project proponents or owners. There is no construction company that does not wish it has such control but the reality, understood by construction workers, is that work depended on decisions and developments over which construction companies have no say.

- For this reason, the Court held in Caseres v. Universal Robina Sugar Milling Corporation that the repeated and successive rehiring of project employees do not qualify them as regular employees, as length of service is not the controlling determinant of the employment tenure of a project employee, but whether the employment has been fixed for a specific project or undertaking, its completion has been determined at the time of the engagement of the employee.

- Additionally, in Malicdem, et al. v. Marulas Industrial Corporation, et al., the Court took judicial notice of the fact that in the construction industry, an employee's work depends on the availability of projects. The employee's tenure "is not permanent but coterminous with the work to which he is assigned."Consequently, it would be extremely burdensome for the employer, who depends on the availability of projects, to carry the employee on a permanent status and pay him wages even if there are no projects for him to work on. An employer cannot be forced to maintain the employees in the payroll, even after the completion of the project. "To do so would make the employee a privileged retainer who collects payment from his employer for work not done. This is extremely unfair to the employers and amounts to labor coddling at the expense of management."

- It must be noted that in claims for payment of salary differential, SIL, holiday pay and 13^th month pay, the burden rests on the employer to prove payment. This standard follows the basic rule that in all illegal dismissal cases the burden rests on the defendant to prove payment rather than on the plaintiff to prove non-payment. This likewise stems from the fact that all pertinent personnel files, payrolls, records, remittances and other similar documents - which will show that the differentials, SIL and other claims of workers have been paid - are not in the possession of the worker but are in the custody and control of the employer.

- It bears stressing that premium pays for holidays and rest days, are not usually incurred in the normal course of business. As such, the burden is shifted on the employee to prove that he actually rendered service on holidays and rest days.