MACARTHUR MALICDEM and HERMENIGILDO FLORES, petitioners, vs.
The "Project Employment Agreement," reveals that there was a
MARULAS INDUSTRIAL CORPORATION & MIKE MANCILLA,respondents stipulated probationary period of 6 months from its commencement. It
was provided therein that in the event that they would be able to
February 26, 2014 | Mendoza, J. comply with the companys standards and criteria within such period,
they shall be reclassified as project employees with respect to the
FACTS: remaining period of the effectivity of the contract.
Malicdem and Flores were hired by Marulas as extruder operators. Under Art 281 LC, however, "an employee who is allowed to work after
They were responsible for the bagging of filament yarn, the quality of a probationary period shall be considered a regular employee." When
of yarn package and the cleanliness of the work place area. Their an employer renews a contract of employment after the lapse of the
employment contracts were for a period of 1 year. six-month probationary period, the employee thereby becomes a
Every year, they would sign a Resignation/Quitclaim in favor of regular employee.
Marulas a day after their contracts ended, and then sign another o Maraguinot, Jr. v. NLRC: a project or work pool employee, who has
contract for 1 year. One day, Flores was told not to report for work been: (1) continuously, as opposed to intermittently, rehired by the
anymore after being asked to sign a paper by Marulas' HR Head to same employer for the same tasks or nature of tasks; and (2) those
the effect that he acknowledged the completion of his contractual tasks are vital, necessary and indispensable to the usual business or
trade of the employer, must be deemed a regular employee.
status. Malicdem was also terminated after signing a similar
document. Thus, both claimed to have been illegally dismissed. There was clearly a deliberate intent to prevent the regularization of
the petitioners. There was no actual project. As there was no specific
Marulas countered that their contracts showed that they were fixed-
project or undertaking to speak of, the respondents cannot invoke the
term employees for a specific undertaking which was to work on a
exception in Article 280 of the Labor Code. This is a clear attempt to
particular order of a customer for a specific period. Their severance
frustrate the regularization of the petitioners and to circumvent the law.
from employment was due to the expiration of their contracts.
Even assuming arguendo that they were project employees, the
LA: no illegal dismissal; Malicdem and Flores were not terminated and
petitioners could only be considered as regular employees as the two
that their employment naturally ceased when their contracts expired;
factors enumerated in Maraguinot, Jr., are present in this case. They
however, ordered Marulas to pay Malicdem and Flores their respective
were continuously rehired by the same employer for the same position
wage differentials
as extruder operators. Their work was vital, necessary and
NLRC: appeal partially granted; award of payment of 13th month pay,
indispensable to the usual business or trade of the employer.
service incentive leave and holiday pay for 3 years; still filed MR
The project employment contracts that the petitioners were made to
DENIED
sign every year since the start of their employment were only a
CA: denied petition; issue of WON the petitioners were project
stratagy to violate their security of tenure in the company.
employees or regular employees was factual in nature; affirmed LA;
The respondents invocation of William Uy Construction Corp. v.
MR denied
Trinidad is misplaced because it is applicable only in cases involving
Respondents arguments:
the tenure of project employees in the construction industry.
o petitioners were contractual employees and their rehiring did not
o It is widely known that in the construction industry, a project
amount to regularization
employee's work depends on the availability of projects, necessarily
o William Uy Construction Corp. v. Trinidad: held that the repeated and
the duration of his employment. It is not permanent but coterminous
successive rehiring of project employees did not qualify them as
with the work to which he is assigned.
regular employees, as length of service was not the controlling
o It would be extremely burdensome for the employer, who depends
determinant of the employment tenure of a project employee, but
on the availability of projects, to carry him as a permanent employee
whether the employment had been fixed for a specific project or
Ratio: once the project is completed it would be unjust to require the
undertaking, its completion had been determined at the time of the
employer to maintain these employees in their payroll. To do so
engagement of the employee
would make the employee a privileged retainer who collects payment
from his employer for work not done. This is extremely unfair to the
ISSUE: WON CA erred in not finding any grave abuse of discretion amounting employers and amounts to labor coddling at the expense of
to lack or excess of jurisdiction on the part of the NLRC management.
Petition GRANTED.
RULING: YES
