Bonghanoy v. BSP and Co., Inc.

THIRD DIVISION

[G.R. No. 226497. June 30, 2021.][Formerly UDK-15596]

EDWIN BONGHANOY, ESPIRIDION BACUS, LORJIM PREGLO, RUEL DANOCO, ARDEN COMISO, ALBERTO INGHOG, NELSON MEDRAN, AND EDWIN ESPANTALEON, petitioners,vs. BSP AND COMPANY, INC., BEN S. PONIO, AND ROLANDO OCONER, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated June 30, 2021, which reads as follows:

"G.R. No. 226497 [Formerly UDK-15596] (EDWIN BONGHANOY, ESPIRIDION BACUS, LORJIM PREGLO, RUEL DANOCO, ARDEN COMISO, ALBERTO INGHOG, NELSON MEDRAN, AND EDWIN ESPANTALEON, petitioners, v. BSP AND COMPANY, INC., BEN S. PONIO, AND ROLANDO OCONER, respondents). — A project employee is an employee hired for a specific project or undertaking and apprised of its scope and duration at the time of the engagement.

The length of service or the re-hiring of construction workers under project employment contracts will not render them regular employees, as their re-hiring is a consequence of the preference on experienced workers in the construction industry. 1

This Court resolves the appeal filed by Edwin Bonghanoy, Espiridion Bacus, Lorjim Preglo, Ruel Danoco, Arden Comiso, Alberto Inghog, Nelson Medran, and Edwin Espantaleon (Bonghanoy, et al.) assailing the Decision 2 and Resolution 3 of the Court of Appeals, which affirmed the Labor Arbiter and National Labor Relations Commission's denial of Bonghanoy, et al.'s complaint for illegal dismissal.

BSP and Company, Inc. (BSP), a construction firm with Ben-Azel S. Ponio as its president and Rolando H. Oconer as its Cebu head, repeatedly hired Bonghanoy, et al., as construction workers for various projects. 4

On May 23, 2012, 5 Bonghanoy, et al., filed a complaint for illegal dismissal and money claims against BSP. They maintained that BSP assigned them to different construction sites and that their employment was never interrupted despite the varying assignments. They also claimed that they were never apprised of the nature and term of their work, specifically if they were to work as regular employees or project employees, and that they never executed a contract of employment with BSP. 6

They likewise prayed for the award of salary differentials, overtime pay, thirteenth month pay, regular holiday pay, and service incentive leave pay in their complaint. 7

On September 14, 2012, 8 the Labor Arbiter found that Bonghanoy, et al., were entitled to their monetary claims, but held that they were project employees. Thus, they were not illegally dismissed as their project employment merely expired. 9

Bonghanoy, et al., appealed the Labor Arbiter's Decision to the National Labor Relations Commission. On April 30, 2013, 10 the National Labor Relations Commission affirmed the Labor Arbiter's decision but with modification, directing BSP to pay salary differential and service incentive leave pay amounting to P58,688.45. 11 The dispositive of the National Labor Relations Commission Decision reads: CAIHTE

WHEREFORE, premises considered, the appealed Decision, dated 14 September 2012, is hereby MODIFIED. Respondent BSP and Company, Inc. is directed to pay complainants their monetary award in the aggregate amount of Fifty Eight Thousand Six Hundred Eighty Eight and 45/100 (P58,688.45).

SO ORDERED.12 (Emphasis in the original)

Bonghanoy, et al., moved for a reconsideration of the National Labor Relations Commission's Decision, but their motion was denied in an August 30, 2013 Resolution. 13

The case was then elevated to the Court of Appeals through a Petition for Certiorari14 under Rule 65.

On July 31, 2015, the Court of Appeals 15 dismissed their petition and upheld the findings of the National Labor Relations Commission.

The Court of Appeals affirmed the National Labor Relations Commission's finding that as project employees in the construction industry, Bonghanoy, et al., were not dismissed, much less illegally dismissed, when their employment contracts expired. 16 The Court of Appeals pointed out that Bonghanoy, et al.'s employment contracts specified the duration and scope of the specific projects their services were engaged for, making them project employees. 17

The Court of Appeals likewise found that there was nothing in the employment contracts that would show an attempt to thwart the construction workers' security of tenure, as they were informed of the period of their employment and they voluntarily agreed to it. 18 It also denied Bonghanoy, et al.'s claims for separation pay as well as moral and exemplary damages. 19

The dispositive portion of the Court of Appeals Decision reads:

IN VIEW of the foregoing disquisition, the petition is hereby DISMISSED. The decision and resolution of the National Labor Relations Commission dated April 30, 2013 and August 30, 2013, respectively are AFFIRMED in toto.

SO ORDERED.20 (Emphasis in the original)

Bonghanoy, et al., moved for a reconsideration 21 of the Court of Appeals Decision, but the Court of Appeals denied their motion in its April 20, 2016 Resolution. 22

In their Petition for Review on Certiorari, 23 petitioners Bonghanoy, et al., assert that they are respondent BSP's regular employees, as they were engaged to perform activities which were indispensable to respondent's usual construction business. They add that their employment was never fixed for a specific project and that no valid project employment contract was ever executed between them and respondent. 24

Petitioners also point out that the employment contracts relied upon by the Court of Appeals as evidence of project employment, were replete with irregularities since some of the contracts did not contain a completion date. Even if they indicated a completion date, petitioners claim they worked even beyond that date. 25

Petitioners likewise belie the Court of Appeals' finding that there were gaps in their employment, and insisted that they continuously worked for respondent. Further, they claim that their non-receipt of the required completion bonus indicates that they were not project employees, but regular employees. 26

Finally, petitioners maintain that their termination from employment was tainted with malice and bad faith, hence, entitling them to moral and exemplary damages. 27

In their Comment, 28 respondents summarize 29 the different employment contracts for the different projects or phases of projects that they entered into with petitioners. Respondents also state that petitioners were paid their 13th month pay and were given notice of their contract completion. 30

Respondents then assert that the Court of Appeals did not err when it found petitioners to be project employees because they were engaged for distinct and separate projects, the duration and scope of which were made known to them prior to the start of the projects. 31 Thus, respondents contend that petitioners were not illegally dismissed, as the completion of the projects naturally led to the valid termination of their employment 32 or the expiration of their contracts. 33

Finally, respondents maintain that the Court of Appeals did not err in denying petitioners' monetary claims, considering that no illegal dismissal took place. 34

In their Reply, 35 petitioners reiterate that they were regular employees and not project employees. They also insist that they were never informed of the duration and scope of their employment, contrary to respondents' assertion. 36

The sole issue for this Court's resolution is whether or not the Court of Appeals erred in upholding the labor tribunals' finding that petitioners were project employees. DETACa

I

In undertaking a review of the Court of Appeals' Decision, this Court determines the legal correctness of the assailed decision "from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the [National Labor Relations Commission] decision before it." 37Montoya v. Transmed Manila Corporation38 explains:

In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with the review for jurisdictional error that we undertake under Rule 65. Furthermore. Rule 45 limits us to the review of questions of law raised against the assailed CA decision. In ruling for legal correctness, we have to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to it; we have to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC decision on the merits of the case was correct. In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. This is the approach that should be basic in a Rule 45 review of a CA ruling in a labor case. In question form, the question to ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case? 39 (Citations omitted)

Grave abuse of discretion exists when a court or tribunal acts capriciously or whimsically exercises judgment. Simple abuse of discretion will not suffice, as grave abuse of discretion presupposes an abuse so flagrant that it practically amounts to a court or tribunal's refusal to perform its lawful duty. 40

A review of the records convinces this Court that the affirmed decisions of the labor tribunals were supported by substantial evidence. Hence, they were not rendered with grave abuse of discretion and the Court of Appeals did not err in upholding them.

II

Project employment is defined in Article 295 41 of the Labor Code which provides:

ARTICLE 295. Regular and casual employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity actually exist.

A project employee then is an employee who is assigned to a specific project or undertaking, whose scope and duration of employment were made known to them at the time of the engagement. 42

In ALU-TUCP v. National Labor Relations Commission, 43 this Court recognized the prevalence and validity of project employment contracts in the construction industry in light of the nature of the construction business where a contractor might carry out several separate projects at the same time or successively:

[A] project could refer to 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. Such job or undertaking begins and ends at determined or determinable times. The typical example of this first type of project is a particular construction job or project of a construction company. A construction company ordinarily carries out two or more discrete identifiable construction projects: e.g., a twenty-five-storey hotel in Makati; a residential condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these separate projects, the scope and duration of which has been determined and made known to the employees at the time of employment, are properly treated as "project employees," and their services may be lawfully terminated at completion of the project. 44

Further, this Court has repeatedly stated that the length of service or the re-hiring of construction workers on different projects or phases of the same projects will not render them regular employees, as their re-hiring is a consequence of the preference on experienced workers in the construction industry. 45

We then declared in E. Ganzon, Inc. v. Ando, Jr.46 that the employer has the burden of proving that an employee is project-based:

To be considered as project-based, the employer has the burden of proof to show that: (a) the employee was assigned to carry out a specific project or undertaking and (b) the duration and scope of which were specified at the time the employee was engaged for such project or undertaking. It must be proved that the particular work/service to be performed as well as its duration are defined in the employment agreement and made clear to the employee who was informed thereof at the time of hiring. 47

Department Order No. 19, Series of 1993 issued by the Department of Labor and Employment specified that employees in the construction industry are generally categorized as project employees and non-project employees. 48 It provided the following indicators of project employment:

2.2 Indicators of project employment — Either one or more of the following circumstances, among others, may be considered as indicators that an employee is a project employee.

(a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable.

(b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring.

(c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer.

(e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees' terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies. aDSIHc

To support their claim that petitioners were project employees, respondents summarized the projects that petitioners worked on: 49

 

PETITIONERS	DURATION OF PROJECT	PROJECT	SALARY/DAY
Edwin Bonghanoy	a) April 14, 2007-more or less until project completion.	Kishanta Site Development Works	P230.00
b) December 22, 2008-more or less until project completion	Pueblo Verde	P276.00
c) April 2, 2009-July 2, 2009 or more or less until project completion.	Kishanta Expansion	P276.00
d) January 5, 2010-April 5, 2010 or more or less until project completion.	Kishanta Expansion	P276.00
e) April 6, 2010-July 6, 2010 or more or less until project completion.	Kishanta Expansion	P276.00
f) July 7, 2010-October 5, 2010 or more or less until project completion.	Kishanta Expansion	P285.00
g) March 28, 2011-June 26, 2011 or more or less until project completion	Krisdale Hotel	P285.00
* On April 7, 2011 — transferred to another project.		P285.00
h) April 7, 2011-July 6, 2011 or more or less until project completion	Pristina North Residences	P285.00
i) December 5, 2011-February 4, 2012 or more or less until project completion	Heritage Site Development Works	P300.00
Nelson Medrano	a) January 11, 2011-February 11, 2011 or more or less until project completion.	Heritage Site Development Works	P267.00
b) February 11, 2011-March 11, 2011 or more or less until project completion.	Heritage Site Development Works	P267.00
Edwin Espantaleon	a) June 20, 2010-August 10, 2010 or more or less until project completion.	Monterraza's De Cebu	P276.00
b) August 10, 2010-November 10, 2010 or more or less until project completion.	Heritage Site Development Works	P276.00
c) November 10, 2010-February 10, 2011 or more or less until project completion.	Heritage Site Development Works	P276.00
d) February 11, 2011-March 11, 2011 or more or less until project completion.	Heritage Site Development Works	P276.00
Lorgim Preglo	a) April 30, 2007-more or less until project completion.	Kishanta Site	P180.00
b) December 21, 2009-March 21, 2010 or more or less until project completion.	Kishanta Expansion	P267.00
c) March 22, 2010-June 22, 2010 or more or less until project completion.	Ajoya Riverside Project	P267.00
d) December 10, 2011-February 9, 2012 or more or less until project completion.	Heritage Site Development Works	P285.00
Ruel Danoco	a) July 9, 2010-September 9, 2010 or more until project completion.	Heritage Site Development Works	P267.00
b) September 9, 2010-December 9, 2010 or more or less until project completion.	Heritage Site Development Works	P267.00
c) December 9, 2010-March 9, 2011 or more or less until project completion.	Heritage Site Development Works	P267.00
d) March 9, 2011-May 9, 2011 or more or less until project completion	Heritage Site Development Works	P267.00
Alberto Inghog	a) March 23, 2011-June 21, 2011 or more or less until project completion.	Krisdale Hotel	P276.00
* May 26, 2011 — finished contract
b) May 28, 2011-August 26, 2011 or more or less until project completion.	Heritage Site Development Works	P276.00
Arden Comiso	a) December 1, 2010-March 1, 2011 or more or less until project completion.	Heritage Site Development Works	P267.00
b) March 1, 2011-May 1, 2011 or more or less until project completion.	Heritage Site Development Works	P267.00
Espiridion Bacus	a) December 1, 2010-March 1, 2011 or more or less until project completion.	Heritage Site Development Works	P267.00
b) March 1, 2011-May 1, 2011 or more or less until project completion.	Heritage Site Development Works	P267.00

 

The Court of Appeals affirmed the labor tribunals' finding that petitioners entered into employment contracts with respondent BSP and that the contracts provided the duration of the specific work they were to perform. The Court of Appeals stated:

In the extant case, it is quite evident that the employment contracts of petitioners certify to the fact that they were hired for specific projects. Their employment was coterminous with the completion of the projects for which they had been hired. The contracts specifically and expressly provided that their tenure of employment depends on the duration of any phase of the project or on the completion of the project.

As rightly put by the NLRC, "a close scrutiny of the evidence adduced by herein respondents reveal that complainants' (petitioners herein) engagement is covered by a project employment contract duly signed by them. In the said contracts, complainants' period of engagement, the duration of their employment, their salary and the project to which they are assigned are clearly stipulated. Thus, at the onset, complainants are fully aware that their services were engaged for the duration of the project to which they are assigned. Based on the foregoing facts, it is apparent that majority of the indicators of project employment is present in the case at bar." 50

We see no reason to reverse the findings of the Court of Appeals and labor tribunals that petitioners were project employees. Whether a worker is a regular or project employee is a question of fact which is usually not a proper subject of a Rule 45 petition where only questions of law may be raised. Further, the unanimous finding of the labor tribunals and the Court of Appeals that a worker was a project employee, if supported by substantial evidence, binds this Court. 51

Finally, there is likewise no merit to petitioners' assertion that they were illegally dismissed, because as the Court of Appeals correctly pointed out, petitioners' employment ended on the date or period specified in their employment contracts. 52 This finds mooring in Alcatel Philippines, Inc. v. Relos53 where this Court stated: "The employment of a project employee ends on the date specified in the employment contract. Therefore, respondent was not illegally dismissed but his employment terminated upon the expiration of his employment contract." 54

WHEREFORE, the Petition is DENIED. The Court of Appeals' July 31, 2015 Decision and April 20, 2016 Resolution in CA-G.R. CEB-SP No. 08183 are AFFIRMED.

SO ORDERED." (Rosario, J.,designated additional Member per Special Order No. 2833.)

By authority of the Court:

MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court

By:

(SGD.) RUMAR D. PASIONDeputy Division Clerk of Court

ATTACHMENT

Proof of Service (Master)

 

Case Number	Date of Reso./Dec.	Item No.	Parties	No. of Envelopes
G.R. No. 226497	06/30/2021	(180) s	Atty. Patrick M. Gallito	3
			COURT OF APPEALS
			Atty. Cristela Wednesday N. Patdu-Aguilar

Submitted by:	Christine Joy V. Lumitap	TOTAL ENVELOPES:	3
Date & Time:	04/28/2022 02:30 PM
Envelopes Sealed by:	Christine Joy V. Lumitap

 

Footnotes

1. See Abesco Construction and Development Corporation v. Ramirez, 521 Phil. 160, 164 (2006) [Per J. Corona, Second Division]; Cioco, Jr. v. C.E. Construction Corporation, 481 Phil. 270, 276 (2004) [Per J. Puno, Second Division]; and D.M. Consunji, Inc. v. National Labor Relations Commission, 401 Phil. 635, 641 (2000) [Per J. Kapunan, First Division].

2. Rollo, pp. 37-48. The July 31, 2015 Decision in CA-G.R. CEB-SP No. 08183 was penned by Associate Justice Gabriel T. Ingles and concurred in by Associate Justices Marilyn R. Lagura-Yap and Marie Christine Azcarraga-Jacob of the Eighteenth Division.

3. Id. at 51-52. The April 20, 2016 Resolution was penned by Associate Justice Gabriel T. Ingles and concurred in by Associate Justices Marilyn R. Lagura-Yap and Gabriel T. Robeniol of the Special Former Eighteenth Division.

4. Id. at 38.

5. Id. at 23.

6. Id. at 22.

7. Id.

8. Id. at 23.

9. Id. at 42.

10. Id. at 37-38.

11. Id. at 42.

12. Id. at 38.

13. Id. at 37.

14. Id. at 60-82.

15. Id. at 37-48.

16. Id. at 43-45.

17. Id. at 44-45.

18. Id. at 45-46.

19. Id. at 46-47.

20. Id. at 48.

21. Id. at 53-59.

22. Id. at 51-52.

23. Id. at 19-31.

24. Id. at 24-25.

25. Id. at 25-26.

26. Id. at 27-28.

27. Id. at 28-29.

28. Id. at 119-143.

29. Id. at 119-126.

30. Id. at 126 and 135-136.

31. Id. at 128-129.

32. Id. at 130-131.

33. Id. at 134.

34. Id. at 136-140.

35. Id. at 150-154.

36. Rollo, pp. 150-151.

37. Magsaysay Maritime Corporation v. National Labor Relations Commission, 630 Phil. 352, 361 (2010) [Per J. Brion, Second Division].

38. 613 Phil. 696 (2009) [Per J. Brion, Second Division].

39. Id. at 707.

40. The Hongkong Shanghai Banking Corporation Employees Union v. National Labor Relations Commission, 421 Phil. 864, 870 (2001) [Per J. Sandoval-Gutierrez, Third Division].

41. Formerly Article 280. Republic Act No. 10151 (2010) or An act allowing the employment of night workers, thereby repealing Articles 130 and 131 of the Labor Code caused the provisions of the Labor Code to be renumbered.

42. Imbuido v. National Labor Relations Commission, 385 Phil. 999, 1009 (2000) [Per J. Buena, Second Division] (citation omitted).

43. 304 Phil. 844 (1994) [Per J. Feliciano, En Banc].

44. Id. at 851-852.

45. See Abesco Construction and Development Corporation v. Ramirez, 521 Phil. 160, 164 (2006) [Per J. Corona, Second Division]; Cioco, Jr. v. C.E. Construction Corporation, 481 Phil. 270, 276 (2004) [Per J. Puno, Second Division]; and D.M. Consunji, Inc. v. National Labor Relations Commission, 401 Phil. 635, 641 (2000) [Per J. Kapunan, First Division].

46. 806 Phil. 58 (2017) [Per J. Peralta, Second Division].

47. E. Ganzon, Inc. v. Ando, Jr., 806 Phil. 58, 66 (2017) [Per J. Peralta, Second Division].

48. Department of Labor and Employment Department Order No. 19, Sec. 2.1 provides:

2.1 Classification of employees — The employees in the construction industry are generally categorized as a) project employees and b) non-project employees. Project employees are those employed in connection with a particular construction project or phase thereof and whose employment is co-terminous with each project or phase of the project to which they are assigned.

Non-project employees, on the other hand, are those employed without reference to any particular construction project or phase of a project.

49. Rollo, pp. 38-41. CA Decision.

50. Id. at 45.

51. Aro v. National Labor Relations Commission, 683 Phil. 605, 612 (2012) [Per J. Peralta, Third Division].

52. Rollo, pp. 46-47.

53. 609 Phil. 307 (2009) [Per J. Carpio, First Division].

54. Id. at 315.