Limjoco v. KForce Global Solutions

FIRST DIVISION

[G.R. No. 232107. June 16, 2021.]

LEANDER L. LIMJOCO, petitioner, vs.KFORCE GLOBAL SOLUTIONS, BUTCH NEPOMUCENO, ANGEL G. ROMUALDEZ, [AND] DEO MISSALYN S. SAVELLANO, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedJune 16, 2021which reads as follows:

"G.R. No. 232107 (Leander L. Limjoco, Petitioner, v. KForce Global Solutions, Butch Nepomuceno, Angel G. Romualdez, [and] Deo Missalyn S. Savellano, Respondents.) — This Petition for Review 1 on certiorari (Petition) seeks to reverse and set aside the Decision 2 dated 15 March 2017 and Resolution 3 dated 06 June 2017 of the Court of Appeals (CA) in CA-G.R. SP No. 147336, denying the petition for certiorari for lack of merit.

Antecedents

Leander L. Limjoco (petitioner) was employed by respondent KForce Global Solutions (KForce) as Programmer Analyst III for a fixed term from 19 July 2013 to 18 January 2014. On 22 July 2013, he was assigned to the company's client, Macquarie Offshore Services Pty., Ltd. (Macquarie). Petitioner's employment contract was extended thrice, with the last extension stipulated to end on 21 January 2015. However, petitioner's employment was pre-terminated effective the end of day of 24 October 2014, due to the completion of the Macquarie project. 4

Petitioner subsequently filed a complaint for illegal dismissal and money claims, contending that he was a regular employee, as he had worked with Butch Nepomuceno (Nepomuceno), Angel G. Romualdez (Romualdez), Deo Missalyn S. Savellano (Savellano), and KForce (collectively, respondents) for more than a year. In fact, his work was indispensable and necessary to the Information Technology (IT) consultancy business of the company. 5

Respondents admitted that the company does provide IT consultancy services. This service was provided to one of its clients, Macquarie, and was covered by a Master Services Agreement-Statement of Work (MSA-SOW), which defined the scope of the service to be provided, the duration of the agreement, and the personnel to be deployed by the company to render the contracted service. 6 Respondents, however, insisted that petitioner was a project employee, whose employment was co-terminus with the Macquarie project to which he was assigned. Notably, the said project was terminated on 24 October 2014. 7

Ruling of the Labor Arbiter

In her Decision 8 dated 18 September 2015, the Labor Arbiter (LA) dismissed the complaint for lack of merit. The LA found that at the time of his engagement, petitioner was apprised of his employment status as a project employee and such fact was clearly stated in his employment contract. With the completion of the project, petitioner's employment also ended. Moreover, his employment contract states that respondents may terminate the same, with or without cause, on a thirty (30)-day written notice. 9 As evidenced by petitioner's notice of termination 10 dated 24 September 2014, this was complied with by respondents. His claim for overtime pay, among others, was likewise denied. As petitioner was a member of the managerial staff, he was not entitled to overtime, but only to basic pay in instances wherein he needed to work overtime or during his rest days and holidays. 11

Aggrieved, petitioner filed an appeal with the National Labor Relations Commission (NLRC). 12 ETHIDa

Ruling of the NLRC

The NLRC denied the appeal in its Decision 13 dated 29 April 2016. It held that petitioner was a project employee whose engagement ended with the completion and termination of the Macquarie project. On the other hand, as a member of the managerial staff, petitioner was exempted from grant of overtime pay, but he was nonetheless paid such out of magnanimity. 14

Dissatisfied with the ruling of the NLRC, petitioner filed a motion for reconsideration, which the NLRC denied in its Resolution 15 dated 21 June 2016. Afterwards, petitioner, sought recourse to the CA by filing a petition for certiorari. 16

Ruling of the CA

The CA affirmed the NLRC's Decision and denied the petition filed before it. In its Decision 17 dated 15 March 2017, the CA held that petitioner was engaged by respondents as a project employee. His contract of employment specified that he was a project employee and he was apprised of his status. Further, the CA held that petitioner was not entitled to overtime pay considering that he belonged to the category of managerial employees receiving salary way beyond that received by respondents' rank-and-file employees. 18

Petitioner subsequently moved for reconsideration, but the CA denied the motion in its Resolution 19 dated 06 June 2017. Hence, the filing of the instant Petition before the Court.

Issues

The issues for this Court's resolution are (1) whether or not petitioner is a project employee; and (2) whether he is entitled to overtime pay, holiday premium pays, attorney's fees, and to be paid his unpaid salary from 16 to 24 October 2014.

Ruling of the Court

The Petition is partly meritorious.

Article 295 of the Labor Code, as renumbered, defines a regular employee as: (a) one that has been engaged to perform tasks usually necessary or desirable in the employer's usual business or trade, without falling within the category of either a fixed, a project, or a seasonal employee; or (b) one that has been engaged for at n least a year, with respect to the activity he or she is engaged, and the work of the employee remains while such activity exists.

On the other hand, a project employee is one whose employment has been fixed for a specified project or undertaking, the completion or termination of which is made known at the time of the engagement of the employee. 20 Consequently, his services may be lawfully terminated upon the completion of such project. 21

In the instant case, the LA, NLRC, and the CA were unanimous in their finding that petitioner was a project employee hired by KForce for a specific task within a particular period already determined at the time of his hiring as evidenced by his employment contract. 22

An examination of petitioner's employment contract showed that he was hired by respondents as a project employee for a fixed term beginning 19 July 2013 until 18 January 2014. He was likewise apprised of his functions, duties, and obligations. 23 The written contract serves as proof that petitioner was indeed informed of the duration and scope of his work, as well as his status as project employee, at the commencement of his engagement. 24

Additionally, it is clearly indicated in petitioner's pay slips that he was engaged as a project employee. In all the pay slips 25 issued to petitioner, the Court found the following details:

 

Designation:	PROGRAMMER/ANALYST, S3
Department:	MACQUARIE
Frequency:	Semi-monthly
Type:	Project Employee
Rate:	[Php]90,000.00

 

Further, as correctly observed by the LA, petitioner was assigned specifically to Macquarie. He reported in the latter's premises and worked on the Macquarie project pursuant to the MSA-SOW between respondents and Macquarie. 26 Incidentally, in the MSA-SOW and its addendum, petitioner was named as the key personnel, 27 or the KForce staff or contractor that Macquarie wanted to be available during the project. cSEDTC

At any rate, petitioner did not refute that he was actually assigned to the Macquarie project during his entire stint at KForce up to the termination of such project. 28 Petitioner, thus, cannot deny his being engaged as a project employee or that he was not advised of his status as such when he was engaged by respondents.

Respondents extended petitioner's contract of employment thrice: from 19 January to 18 April 2014, 29 19 April to 21 July 2014, 30 and 22 July 2014 to January 2015. 31 Notably, these extended contracts contain a notation that "[t]he other terms and conditions as per [the] Contract of Services will still take effect." Petitioner affixed his signature to these documents, clearly signifying his assent to continue to be bound by the terms of the original contract of employment.

It should be stressed that project employment contracts fixing employment for a specific project or undertaking are valid under the law. 32 When such contracts were knowingly and voluntarily signed by the employees, they must be upheld, absent proof that the employers employed force, intimidation, or fraudulently manipulated the former into signing the same. 33 By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He cannot expect to be employed continuously beyond the completion of the project. 34 Thus, when the Macquarie project was finished, petitioner's employment ended with it. To stress, petitioner was not dismissed from employment.

Petitioner insists that since he rendered work that is indispensable to the business of respondents and worked with KForce for one (1) year and three (3) months, that already made him a regular employee.

The fact that petitioner was required to render services necessary or desirable in the operation of respondents' business for more than a year does not in any way impair the validity of his project employment contracts.35 Nonetheless, petitioner's repeated and successively re-hiring still did not qualify him as a regular employee, 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, with its completion having been determined at the time of the engagement of the employee. Further, the proviso in Article 295 of the Labor Code, stating that an employee who has rendered service for at least one (1) year shall be considered a regular employee, pertains to casual employees and not to project employees. 36

Furthermore, the fact that the term of petitioner's employment was extended thrice did not confer to him the status of a regular employee. The records show that the extension was brought about by the corresponding extension of the Macquarie project and when the project ended, petitioner's employment had to cease as well.

Considering that petitioner was a project employee, he was not illegally dismissed from employment. He is, therefore, not entitled to backwages, 37 or to moral and exemplary damages.

While the Court concurs with the labor tribunals and the CA that petitioner was a project employee, the Court does not agree that as a member of the managerial staff, petitioner is automatically not entitled to overtime pay under Article 82 38 of the Labor Code.

Although petitioner was hired as a project employee, he is still entitled to certain benefits under the law, including overtime pay differentials. 39 The test of "supervisory" or "managerial status" depends on whether a person possesses authority to act in the interest of his employer and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. 40

There is no showing that petitioner was actually conferred or was actually exercising the following duties attributable to a member of the managerial staff:

1) The primary duty consists of the performance of work directly related to management of policies of their employer;

2) Customarily and regularly exercise discretion and independent judgment;

3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute, under general supervision, special assignment and tasks; and SDAaTC

4) Who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above. 41

A perusal of petitioner's duties and responsibilities, as stated in the Position Description 42 attached to his employment contract, does not show that he exercises the powers and prerogatives equivalent to managerial actions that require the customary use of independent judgment. As Programmer Analyst III, he develops, designs, modifies and maintains software for highly complex applications with multiple components, under managerial direction. He provides lead support for the project team conducting feasibility studies, troubleshooting escaladed issues and ensuring that project deliverables are completed within time and cost constraints. 43 These functions and the work he did for the Macquarie project are not directly related to the management policies of respondent company.

Considering that respondent is not a member of the managerial staff, he is entitled to overtime pay. While, his payslips prove that he was paid overtime pay, rest day overtime pay, and holiday pay, petitioner claims that the amounts he received were not in accordance with the law. AaCTcI

Respondents had told petitioner that his hourly rate is computed in this wise: monthly rate/21.75 days/8 hours. He was also informed that "[t]he regular hourly rate is the same rate paid for [his] OT, 44 RDOT 45 and holidays." 46 Following this formula, petitioner, who received a salary of Php90,000.00 for the period 16 to 30 September 2013, was paid an hourly rate of Php517.24. For fifteen (15) hours of overtime, he received the amount of Php7,758.62.

Pursuant to Article 87 47 of the Labor Code, as renumbered, petitioner is entitled to receive an additional compensation equivalent to 25% of his daily wage or Php646.55 for every hour of overtime work he rendered. 48 He should have received Php9,698.25 instead of Php7,758.62, which is based on his regular hourly rate. Since petitioner's rest day overtime pays and holiday pays were also based on his regular hourly rate, it is all too clear that petitioner is entitled to overtime pay, rest day overtime pay, and holiday pay differentials.

Petitioner's termination from employment became effective only at the end of day of 24 October 2014. Considering that petitioner was still an employee during the period of 16 to 24 October 2014, he is entitled to the payment of his salary. His claim that he was not paid his salary during that period was unrefuted since respondents failed to show any document to prove that they had paid the same. Meanwhile, petitioner presented as evidence his timesheet 49 for that period.

Since petitioner is entitled to his unpaid salary from 16 to 24 October 2014 and overtime pay, rest day overtime pay, and holiday pay differentials, there is a need to remand the case to the LA for the correct computation of petitioner's monetary benefits. In addition, petitioner should be awarded attorney's fees since he was compelled to litigate and, thus, incur expenses to protect his rights and interest. 50 Ten percent (10%) of the total award is a reasonable amount for attorney's fees. 51 In addition, pursuant to prevailing jurisprudence, a legal interest at the rate of six percent (6%) per annum should be imposed upon the monetary awards granted to petitioner, to be computed from the finality of this Resolution until full payment. 52

Finally, a corporation is a juridical entity with legal personality separate and distinct from those acting for and on its behalf and, in general, from the people comprising it. The general rule is that obligations incurred by the corporation, acting through its directors, officers, and employees, are its sole liabilities. A director or officer shall only be personally liable for the obligations of the corporation, if the following conditions concur: (1) the complainant alleged in the complaint that the director or officer assented to patently unlawful acts of the corporation, or that the officer was guilty of gross negligence or bad faith; and (2) the complainant clearly and convincingly proved such unlawful acts, negligence or bad faith. 53

In the present case, malice or bad faith on the part of Nepomuceno, Romualdez, and Savellano as corporate officers were not sufficiently proven to justify holding them solidarily liable with the corporation for the payment of petitioner's unpaid salary and other monetary benefits. There must be independent proof of malice or bad faith, which is lacking in the present case. 54 Incidentally, the LA had earlier ordered the dismissal of the complaint against Vicente "Butch" Nepomuceno, 55 as he had a personality separate and distinct from the company.56

WHEREFORE, the foregoing premises considered, the instant Petition for Review is PARTIALLY GRANTED. Accordingly, the Decision dated 15 March 2017 and Resolution dated 06 June 2017 of the Court of Appeals in CA-G.R. SP No. 147336, are hereby AFFIRMED with the following MODIFICATIONS:

a) respondent KForce Global Solutions is ORDERED to PAY petitioner Leander L. Limjoco:

1. his salary for the period 16 to 24 October 2014;

2. overtime pay, rest day overtime pay, and holiday pay differentials; and

3. attorney's fees;

b) the records of this case are ORDERED REMANDED to the office of the Labor Arbiter for the correct computation of petitioner's salary for the period 16 to 24 October 2014 as well as overtime pay, rest day overtime pay, and holiday pay differentials;

c) all amounts awarded shall be subject to legal interest of six percent (6%) per annum computed from the date of finality of this Resolution until fully paid; and

d) the corporate officers, respondents Butch Nepomuceno, Angel G. Romualdez, and Deo Missalyn S. Savellano are ABSOLVED from liability.

The rest of the assailed Decision STANDS.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 3-19.

2.Id. at 21-34; penned by Associate Justice Fernanda Lampas Peralta and concurred in by Associate Justices Jane Aurora C. Lantion and Victoria Isabel A. Paredes of the Fifth (5th) Division, Court of Appeals, Manila.

3.Id. at 36-37.

4.Id. at 22.

5.Id. at 23.

6.Id. at 107.

7.Supra at note 5.

8.Id. at 103-115; penned by Labor Arbiter Fe S. Cellan.

9.Id. at 46.

10.Id. at 64.

11.Id. at 113-115.

12.Supra at note 5.

13.Id. at 135-146; penned by Commissioner Isabel G. Panganiban-Ortiguerra and concurred in by Presiding Commissioner Joseph Gerard E. Mabilog and Commissioner Nieves E. Vivar-de Castro of the National Labor Relations Commission, Quezon City.

14.Id. at 143 and 145.

15.Id. at 152-154.

16.Id. at 144-159.

17.Id. at 21-34.

18.Id. at 31-32.

19.Id. at 36-37.

20.Inocentes v. R. Syjuco Construction, Inc., G.R. No. 237020, 29 July 2019 [Per J. Inting].

21.See Minsola v. New City Builders, Inc., G.R. No. 207613, 31 January 2018 [Per J. Reyes, Jr.], citing Dacles v. Millenium Erectors Corp.,et al., 763 Phil. 550, 558-559 (2015), G.R. No. 209822, 08 July 2015 [Per J. Perlas-Bernabe]. See also Omni Hauling Services, Inc. v. Bon, 742 Phil. 335, 343-344 (2014), G.R. No. 199388, 03 September 2014 [Per J. Perlas-Bernabe].

22.See Felipe v. Danilo Divina Tamayo Konstract, Inc., 795 Phil. 891, 899 (2016), G.R. No. 218009, 21 September 2016 [Per J. Mendoza].

23.Rollo, pp. 46-52.

24.Supra at note 20.

25.Rollo, pp. 65-84.

26.Id. at 113.

27.Id. at 150, 152, 154-158.

28.Id. at 142.

29.Id. at 156.

30.Id. at 156.

31.Id. at 157.

32.See Innodata Knowledge Services, Inc. v. Inting, 822 Phil. 314, 335 (2017), G.R. No. 211892, 06 December 2017 [Per J. Peralta].

33.See Herma Shipyard, Inc. v. Oliveros, 808 Phil. 668, 683-684 (2017), G.R. No. 208936, 17 April 2017 [Per J. Del Castillo].

34.E. Ganzon, Inc. v. Ando, Jr., 806 Phil. 58, 68 (2017), G.R. No. 214183, 20 February 2017 [Per J. Peralta].

35.Id. at 72.

36.Caseres v. Universal Robina Sugar Milling Corp., 560 Phil. 615, 623 (2007), G.R. No. 159343, 28 September 2007 [Per J. Austria-Martinez]; Herma Shipyard, Inc. v. Oliveros, supra at note 33 at 693.

37.See Navotas Shipyard Corp. v. Montallana, 730 Phil. 279, 290 (2014), G.R. No. 190053, 24 March 2014 [Per J. Brion].

38. ARTICLE 82. Coverage. [x x x] As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff.

39.See Bajaro v. Metro Stonerich Corp., 830 Phil. 714, 728 (2018), G.R. No. 227982, 23 April 2018 [Per J. Reyes, Jr.].

40.Clientlogic Philippines, Inc. v. Castro, 663 Phil. 74, 83 (2011), G.R. No. 186070, 11 April 2011 [Per J. Nachura].

41.Id. at 83-84.

42.Rollo, pp. 51-52.

43.Id. at 51.

44. Overtime.

45. Rest day overtime.

46.Id. at 62.

47. ARTICLE 87. Overtime Work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

48.Supra at note 39.

49.Rollo, p. 104.

50.See Our Haus Realty Development Corp. v. Parian, 740 Phil. 699, 720 (2014), G.R. No. 204651, 06 August 2014 [Per J. Brion].

51.See Lambert Pawnbrokers and Jewelry Corporation v. Binamira, 639 Phil. 01, 16 (2010), G.R. No. 170464, 12 July 2010 [Per J. Del Castillo].

52.Skyway O & M Corp. v. Reinante, G.R. No. 222233, 28 August 2019 [Per J. Inting].

53.FVR Skills and Services Exponents, Inc. v. Seva, 746 Phil. 244, 260 (2014), G.R. No. 200857, 22 October 2014 [Per J. Brion].

54.Supra at note 51.

55.Rollo, p. 141.

56.Id. at 115.

n Note from the Publisher: Written as "a" in the official document.