Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83738:58038&catid=1588&Itemid=566
Timestamp: 2019-04-23 10:05:50+00:00

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G.R. No. 200857, October 22, 2014 - FVR SKILLS AND SERVICES EXPONENTS, INC. (SKILLEX), FULGENCIO V. RANA AND MONINA R. BURGOS, Petitioners, v. JOVERT SEVA, JOSUEL V. VALENCERINA, JANET ALCAZAR, ANGELITO AMPARO, BENJAMIN ANAEN, JR., JOHN HILBERT BARBA, BONIFACIO BATANG, JR., VALERIANO BINGCO, JR., RONALD CASTRO, MARLON CONSORTE, ROLANDO CORNELIO, EDITO CULDORA, RUEL DUNCIL, MERV1N FLORES, LORD GALISIM, SOTERO GARCIA, JR., REY GONZALES, DANTE ISIP, RYAN ISMEN, JOEL JUNIO, CARLITO LATOJA, ZALDY MARRA, MICHAEL PANTANO, GLENN PILOTON, NORELDO QUIRANTE, ROEL RANCE, RENANTE ROSARIO AND LEONARDA TANAEL, Respondents.
FVR SKILLS AND SERVICES EXPONENTS, INC. (SKILLEX), FULGENCIO V. RANA AND MONINA R. BURGOS, Petitioners, v. JOVERT SEVA, JOSUEL V. VALENCERINA, JANET ALCAZAR, ANGELITO AMPARO, BENJAMIN ANAEN, JR., JOHN HILBERT BARBA, BONIFACIO BATANG, JR., VALERIANO BINGCO, JR., RONALD CASTRO, MARLON CONSORTE, ROLANDO CORNELIO, EDITO CULDORA, RUEL DUNCIL, MERV1N FLORES, LORD GALISIM, SOTERO GARCIA, JR., REY GONZALES, DANTE ISIP, RYAN ISMEN, JOEL JUNIO, CARLITO LATOJA, ZALDY MARRA, MICHAEL PANTANO, GLENN PILOTON, NORELDO QUIRANTE, ROEL RANCE, RENANTE ROSARIO AND LEONARDA TANAEL, Respondents.
We resolve in this petition for review on certiorari1 the challenge to the December 22, 2011 decision2 and the March 2, 2012 resolution3 (assailed CA rulings) of the Court of Appeals (CA) in CA-G.R. SP No. 120991. These assailed CA rulings affirmed the April 28, 2011 decision4 and the June 16, 2011 resolution5 (NLRC rulings) of the National Labor Relations Commission (NLRC) in NLRC LAC No. 08-001687-10 (NLRC NCR Case Nos. 08-11557-09 and 08-11399-09). The NLRC rulings in turn reversed and set aside the June 4, 2010 decision6 of the labor arbiter (LA).
The twenty-eight (28) respondents in this case were employees of petitioner FVR Skills and Services Exponents, Inc. (petitioner), an independent contractor engaged in the business of providing janitorial and other manpower services to its clients. As early as 1998, some of the respondents had already been under the petitioner's employ.
The respondents' respective names, dates of hiring, and positions are indicated in the table7 below.
On April 21, 2008, the petitioner entered into a Contract of Janitorial Service (service contract)8 with Robinsons Land Corporation (Robinsons). Both agreed that the petitioner shall supply janitorial, manpower and sanitation services to Robinsons Place Ermita Mall for a period of one year -from January 1, 2008 to December 31, 2008.9 Pursuant to this, the respondents were deployed to Robinsons.
The petitioner and Robinsons no longer extended their contract of janitorial services. Consequently, the petitioner dismissed the respondents as they were project employees whose duration of employment was dependent on the petitioner's service contract with Robinsons.
The respondents disagreed with the LA and appealed to the NLRC, which reversed the LA's ruling, and held that they were regular employees. The NLRC considered that the respondents had been under the petitioner's employ for more than a year already, some of them as early as 1998.
The CA dismissed the petitioner's certiorari petition and affirmed the NLRC's decision.
The CA also ruled that the fixed term employment contracts signed by the respondents had no binding effect. The petitioner only used these contracts to justify the respondents' illegal dismissal; the petitioner never asked the respondents to execute any contract since their initial hiring. Only after it became apparent that the petitioner's service contract with Robinsons would not be renewed (after its expiration on December 31, 2008), did the petitioner ask the respondents to sign their employment contracts.17 This circumstance, coupled with the threat that the respondents would not be given their salaries if they would not sign the contracts, showed the petitioner's intent to use the contracts to prevent the respondents from attaining regular status.
The petitioner now submits that the CA erred in ruling that the respondents were regular employees and that they had been illegally dismissed. The respondents' contracts of employments did not only provide for a fixed term, but were also dependent on the continued existence of the Robinsons' service contract.19 Since this main contract had not been renewed, the respondents' respective employment contracts were properly terminated. Based on this reasoning, no illegal dismissal took place, only the expiration of the respondents' fixed term contracts.
In the absence of any illegal dismissal, the CA also erred in affirming the NLRC's award of separation pay to the respondents.
Lastly, the petitioner asserts that Rana and Burgos should not be held solidarily liable with the corporation for respondents' monetary claims; they have personalities separate and distinct from the corporation.
We resolve to DENY the petition.
Under this provision, there are two kinds of regular employees, namely: (1) those who were engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who became regular after one year of service, whether continuous or broken, but only with respect to the activity for which they have been hired.
We distinguish these two types of regular employees from a project employee, or one whose employment was fixed for a specific project or undertaking, whose completion or termination had been determined at the time of engagement.
A careful look at the factual circumstances of this case leads us to the legal conclusion that the respondents are regular and not project employees.
Guided by this test, we conclude that the respondents' work as janitors, service crews and sanitation aides, are necessary or desirable to the petitioner's business of providing janitorial and manpower services to its clients as an independent contractor.
Also, the respondents had already been working for the petitioner as early as 1998. Even before the service contract with Robinsons, the respondents were already under the petitioner's employ.26They had been doing the same type of work and occupying the same positions from the time they were hired and until they were dismissed in January 2009. The petitioner did not present any evidence to refute the respondents' claim that from the time of their hiring until the time of their dismissal, there was no gap in between the projects where they were assigned to. The petitioner continuously availed of their services by constantly deploying them to its clients.
In this light, we thus conclude that although the respondents were assigned as contractual employees to the petitioner's various clients, under the law, they remain to be the petitioner's regular employees, who are entitled to all the rights and benefits of regular employment.
The records show that at the time of the respondents' dismissal, they had already been continuously working for the petitioner for more than a year. Despite this, they never signed any employment contracts with the petitioner, except the contracts they belatedly signed when the petitioner's own contract of janitorial services with Robinsons neared expiration.
As already discussed, for an employee to be validly categorized as a project employee, it is necessary that the specific project or undertaking had been identified and its period and completion date determined and made known to the employee at the time of his engagement. This provision ensures that the employee is completely apprised of the terms of his hiring and the corresponding rights and obligations arising from his undertaking. Notably, the petitioner's service contract with Robinsons was from January 1 to December 31, 2008. The respondents were only asked to sign their employment contracts for their deployment with Robinsons halfway through 2008, when the petitioner's service contract was about to expire.
We find the timing of the execution of the respondents' respective employment contracts to be indicative of the petitioner's calculated plan to evade the respondents' right to security of tenure, to ensure their easy dismissal as soon as the Robinsons' contract expired. The attendant circumstances cannot but raise doubts as to the petitioner's good faith.
If the petitioner really intended the respondents to be project employees, then the contracts should have been executed right from the time of hiring, or when the respondents were first assigned to Robinsons, not when the petitioner's service contract was winding up. The terms and conditions of the respondents' engagement should have been disclosed and explained to them from the commencement of their employment. The petitioner's failure to do so supports the conclusion that it had been in bad faith in evading the respondents' right to security of tenure.
Moreover, under Article 1390 of the Civil Code, contracts where the consent of a party was vitiated by mistake, violence, intimidation, undue influence or fraud, are voidable or annullable. The petitioner's threat of non­payment of the respondents' salaries clearly amounted to intimidation. Under this situation, and the suspect timing when these contracts were executed, we rule that these employment contracts were voidable and were effectively questioned when the respondents filed their illegal dismissal complaint.
The petitioner argues that these substantive and procedural requisites do not apply to the respondents' case since they were employed under fixed term contracts. According to the petitioner, the respondents' employment contracts lapsed by operation of law as the necessary consequence of the termination and non-renewal of its service contract with Robinsons. Because of this, there was no illegal dismissal to speak of, only contract expiration.
We do not agree with the petitioner.
Having already determined that the respondents are regular employees and not project employees, and that the respondents' belated employment contracts could not be given any binding effect for being signed under duress, we hold that illegal dismissal took place when the petitioner failed to comply with the substantive and procedural due process requirements of the law.
The petitioner also asserts that the respondents' subsequent absorption by Robinsons' new contractors - Fieldmen Janitorial Service Corporation and Altaserv - negates their illegal dismissal. This reasoning is patently erroneous. The charge of illegal dismissal was made only against the petitioner which is a separate juridical entity from Robinsons' new contractors; it cannot escape liability by riding on the goodwill of others.
By law, the petitioner must bear the legal consequences of its violation of the respondents' right to security of tenure. The facts of this case show that since the respondents' hiring, they had been under the petitioner's employ as janitors, service crews and sanitation aides. Their services had been continuously provided to the petitioner without any gap. Notably, the petitioner never refuted this allegation of the respondents. Further, there was no allegation that the petitioner went out of business after the non-renewal of the Robinsons' service contract. Thus, had it not been for the respondents' dismissal, they would have been deployed to the petitioner's other existing clients.
We cannot give credence to the petitioner's assertion that under Section 10 of DO 18-02,37 the respondents are not entitled to separation pay because their employment was terminated due to the completion of the project where they had been engaged. This provision must be construed with the rest of DO 18-02's other provisions.
As earlier pointed out, Section 7 of DO 18-02 treats contractual employees as the independent contractor's regular employees for purposes of enforcing the Labor Code and other social legislation laws. Consequently, a finding of regular employment entitles them to the rights granted to regular employees, particularly the right to security of tenure and to separation pay.
Thus, a holistic reading of DO 18-02,38 guides us to the conclusion that Section 10 only pertains to contractual employees who are really project employees. They are not entitled to separation pay since the end of the project for which they had been hired necessarily results to the termination of their employment. On the other hand, we already found that the respondents are the petitioner's regular employees. Thus, their illegal dismissal entitles them to backwages and reinstatement or separation pay, in case reinstatement is no longer feasible.
Finally, we modify the CA's ruling that Rana and Burgos, as the petitioner's president and general manager, should be held solidarity liable with the corporation for its monetary liabilities with the respondents.
In the present case, the respondents failed to show the existence of the first requisite. They did not specifically allege in their complaint that Rana and Burgos willfully and knowingly assented to the petitioner's patently unlawful act of forcing the respondents to sign the dubious employment contracts in exchange for their salaries. The respondents also failed to prove that Rana and Burgos had been guilty of gross negligence or bad faith in directing the affairs of the corporation.
WHEREFORE, in light of these considerations, we hereby DENY the petition. We AFFIRM with MODIFICATION the Court of Appeals' decision dated December 22, 2011 and resolution dated March 2, 2012 in CA-G.R. SP No. 120991, which also AFFIRMED the National Labor Relation Commission's decision dated April 28, 2011 and resolution dated June 16, 2011. Petitioners Fulgencio V. Rana and Monina R. Burgos are hereby absolved from paying the respondents' monetary awards in their personal capacity. No costs.
* Designated as Acting Member in lieu of Associate Justice Marvic M.V.F. Leonen, per Special Order No, 1841 dated October 13, 2014.
2 Penned by Associate Justice Ramon R. Garcia, and concurred in by Associate Justices Amelita G. Tolentino and Samuel H. Gaerlan; id. at 56-74.
4 Penned by Commissioner Teresita D Castillon-Lora, and concurred in by Commissioners Raul T. Aquino and Napoleon M. Menese; id. at 299-317.
6 Penned by Labor Arbiter Quintin B. Cueto III; id. at 259-274.
21 Id. at 367. 22 Id. at 375.
23 The provisions of the Labor Code had been renumbered due to the taking effect of Republic Act No. 10151, An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of the Labor Code.
Article 280. 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 service to be performed is seasonal in nature and the 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 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 exists.
25cralawred Gapayao v. Fulo, G.R. No. 193493, June 13, 2013, 698 SCRA 485, 500.
27 Department of Labor and Employment, Rules Implementing Articles 106-109 of the Labor Code as Amended.
28 Section 7, DO 18-02.
29 Section 8, DO 18-02.
30 557 Phil. 789 (2007).
32Bughaw, Jr., v. Treasure Island Industrial Corporation, 573 Phil. 435, 443 (2008).
34 G.R. No. 192514, April 18, 2012, 670 SCRA 235.
35 Labor Code, Article 279.
Section 10. Effect of Termination of Contractual Employment. In cases of termination of employment prior to the expiration of the contract between the principal and the contractor or subcontractor, the right of the contractual employee to separation pay or other related benefits shall be governed by the applicable laws and jurisprudence on termination of employment.
Where the termination results from the expiration of the contract between the principal and the contractor or subcontractor, or from the completion of the phase of the job, work or service for which the contractual employee is engaged, the latter shall not be entitled to separation pay. However, this shall be without prejudice to completion bonuses or other emoluments, including retirement pay as may be provided by law or in the contract between the principal and the contractor or subcontractor.
39Santos v. National Labor Relations Commission, 325 Phil. 145, 156(1996).
40Francisco v. Mallen, Jr, G.R. No 173169, September 22, 2010, 631 SCRA 1 18, 123-124.
41Carag v. National Labor Relations Commission, 548 Phil. 581, 602, (2007).
42 Businessday Information Systems and Services, Inc. v. National Labor Relations Commission, G.R. No. 103575, April 5, 1993, 221 SCRA 9, 14.

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