G.R. No. 120969 January 22, 1998 DAVIDE, JR., J.

: Private respondents further contend that it was the associate

producer of the film "Mahirap Maging Pogi," who hired petitioner
Maraguinot. The movie shot from 2 July up to 22 July 1992, and it
ALEJANDRO MARAGUINOT, JR. and PAULINO
was only then that Maraguinot was released upon payment of his
ENERO, petitioners, 
last salary, as his services were no longer needed. Anent petitioner
vs.
Enero, he was hired for the movie entitled "Sigaw ng Puso," later re-
NATIONAL LABOR RELATIONS COMMISSION (SECOND
tired "Narito and Puso." He went on vacation on 8 June 1992, and
DIVISION) composed of Presiding Commissioner RAUL T.
by the time he reported for work on 20 July 1992, shooting for the
AQUINO, Commissioner ROGELIO I. RAYALA and
movie had already been completed.9
Commissioner VICTORIANO R. CALAYCAY (Ponente), VIC DEL
ROSARIO and VIVA FIMS, respondents.
After considering both versions of the facts, the Labor Arbiter found
as follows:
By way of this special civil action for certiorari under Rule 65 of the
Rules of Court, petitioners seek to annul the 10 February 1995
Decision 1 of the National Labor Relations Commission (hereafter On the first issue, this Office rules that complainants are
NLRC), and its 6 April 1995 Resolution 2 denying the motion to the employees of the respondents. The producer cannot
reconsider the former in NLRC-NCR-CA No. 006195-94. The be considered as an independent contractor but should
decision reversed that of the Labor Arbiter in NLRC-NCR-Case No. be considered only as a labor-only contractor and as
00-07-03994-92. such, acts as a mere agent of the real employer, the
herein respondent. Respondents even failed to name and
specify who are the producers. Also, it is an admitted fact
The parties present conflicting sets of facts.
that the complainants received their salaries from the
respondents. The case cited by the respondents, Rosario
Petitioner Alejandro Maraguinot, Jr. maintains that he was Brothers, Inc. vs. Ople, 131 SCRA 72 does not apply in
employed by private respondents on 18 July 1989 as part of the this case.
filming crew with a salary of P375.00 per week. About four months
later, he was designated Assistant Electrician with a weekly salary
It is very clear also that complainants are doing activities
of P400.00, which was increased to P450.00 in May 1990. In June
which are necessary and essential to the business of the
1991, he was promoted to the rank of Electrician with a weekly
respondents, that of movie-making. Complainant
salary of P475.00, which was increased to P539.00 in September
Maraguinot worked as an electrician while complainant
1991.
Enero worked as a crew [member]. 10

Petitioner Paulino Enero, on his part, claims that private

Hence, the Labor Arbiter, in his decision of 20 December
respondents employed him in June 1990 as a member of the
1993, decreed as follows:
shooting crew with a weekly salary of P375.00, which was
increased to P425.00 in May 1991, then to P475.00 on 21
December 1991. 3 WHEREFORE, judgment is hereby rendered declaring
that complainants were illegally dismissed.
Petitioners' tasks consisted of loading, unloading and arranging
movie equipment in the shooting area as instructed by the Respondents are hereby ordered to reinstate complainant
cameraman, returning the equipment to Viva Films' warehouse, to their former positions without loss [of] seniority rights
assisting in the "fixing" of the lighting system, and performing other and pay their backwages starting July 21, 1992 to
tasks that the cameraman and/or director may assign. 4 December 31, 1993 temporarily computed in the amount
of P38,000.00 for complainant Paulino Enero and
P46,000.00 for complainant Alejandro Maraguinot, Jr. and
Sometime in May 1992, petitioners sought the assistance of their
thereafter until actually reinstated.
supervisors, Mrs. Alejandria Cesario, to facilitate their request that
private respondents adjust their salary in accordance with the
minimum wage law. In June 1992, Mrs. Cesario informed petitioners Respondents are ordered to pay also attorney's fees
that Mr. Vic del Rosario would agree to increase their salary only if equivalent to ten (10%) and/or P8,400.00 on top of the
they signed a blank employment contract. As petitioners refused to award. 11
sign, private respondents forced Enero to go on leave in June 1992,
then refused to take him back when he reported for work on 20 July
Private respondents appealed to the NLRC (docketed as NLRC
1992. Meanwhile, Maraguinot was dropped from the company
NCR-CA No. 006195-94). In its decision 12 of 10 February 1995, the
payroll from 8 to 21 June 1992, but was returned on 22 June 1992.
NLRC found the following circumstances of petitioners' work "clearly
He was again asked to sign a blank employment contract, and
established:"
when he still refused, private respondents terminated his services
on 20 July 1992. 5 Petitioners thus sued for illegal dismissal 6 before
the Labor Arbiter. 1. Complainants [petitioners herein] were hired
for specific movie projects and their
employment was co-terminus with each movie
On the other hand, private respondents claim that Viva Films
project the completion/termination of which are
(hereafter VIVA) is the trade name of Viva Productions, Inc., and
pre-determined, such fact being made known to
that it is primarily engaged in the distribution and exhibition of
complainants at the time of their engagement.
movies — but not in the business of making movies; in the same
vein, private respondent Vic del Rosario is merely an executive
producer, i.e., the financier who invests a certain sum of money for xxx xxx xxx
the production of movies distributed and exhibited by VIVA. 7
2 Each shooting unit works on one movie
Private respondents assert that they contract persons called project at a time. And the work of the shooting
"producers" — also referred to as "associate producers" 8 — to units, which work independently from each
"produce" or make movies for private respondents; and contend other, are not continuous in nature but depends
that petitioners are project employees of the association producers on the availability of movie projects.
who, in turn, act as independent contractors. As such, there is no
employer-employee relationship between petitioners and private
3. As a consequence of the non-continuous
respondents.
work of the shooting units, the total working
hours logged by complainants in a month show
 extreme variations. . . For instance, The Office of the Solicitor General (OSG) is convinced that this
complainant Maraguinot worked for petition is improper since petitioners raise questions of fact,
only 1.45 hours in June 1991 but logged a total particularly, the NLRC's finding that petitioners were project
of 183.25 hours in January 1992. Complainant employees, a finding supported by substantial evidence; and
Enero logged a total of only 31.57 hours in submits that petitioners' reliance on Article 280 of the Labor Code to
September 1991 but worked for 183.35 hours support their contention that they should be deemed regular
the next month, October 1991. employees is misplaced, as said section "merely distinguishes
between two types of employees, i.e., regular employees and
casual employees, for purposes of determining the right of an
4. Further shown by respondents is the
employee to certain benefits."
irregular work schedule of complainants on a
daily basis. Complainant Maraguinot was
supposed to report on 05 August 1991 but The OSG likewise rejects petitioners' contention that since they
reported only on 30 August 1991, or a gap of were hired not for one project, but for a series of projects, they
25 days. Complainant Enero worked on 10 should be deemed regular employees. Citing Mamansag
September 1991 and his next scheduled v. NLRC, 14 the OSG asserts that what matters is that there was a
working day was 28 September 1991, a gap of time-frame for each movie project made known to petitioners at the
18 days. time of their hiring. In closing, the OSG disagrees with petitioners'
claim that the NLRC's classification of the movie producers as
independent contractors had no basis in fact and in law, since, on
5. The extremely irregular working days and
the contrary, the NLRC "took pains in explaining its basis" for its
hours of complainants' work explain the lump
decision.
sum payment for complainants' services for
each movie project. Hence, complainants were
paid a standard weekly salary regardless of the As regards the propriety of this action, which the Office of the
number of working days and hours they logged Solicitor General takes issue with, we rule that a special civil action
in. Otherwise, if the principle of "no work no for certiorari under Rule 65 of the Rules of Court is the proper
pay" was strictly applied, complainants' remedy for one who complains that the NLRC acted in total
earnings for certain weeks would be very disregard of evidence material to or decisive of the controversy. 15 In
negligible. the instant case, petitioners allege that the NLRC's conclusions
have no basis in fact and in law, hence the petition may not be
dismissed on procedural or jurisdictional grounds.
6. Respondents also alleged that complainants
were not prohibited from working with such
movie companies like Regal, Seiko and FPJ The judicious resolution of this case hinges upon, first, the
Productions whenever they are not working for determination of whether an employer-employee relationship
the independent movie producers engaged by existed between petitioners and private respondents or any one of
respondents . . . This allegation was never private respondents. If there was none, then this petition has no
rebutted by complainants and should be merit; conversely, if the relationship existed, then petitioners could
deemed admitted. have been unjustly dismissed.

The NLRC, in reversing the Labor Arbiter, then concluded A related question is whether private respondents are engaged in
that these circumstances, taken together, indicated that the business of making motion pictures. Del Rosario is necessarily
complainants (herein petitioners) were "project engaged in such business as he finances the production of movies.
employees." VIVA, on the other hand, alleges that it does not "make" movies, but
merely distributes and exhibits motion pictures. There being no
further proof to this effect, we cannot rely on this self-serving denial.
After their motion for reconsideration was denied by the NLRC in its
At any rate, and as will be discussed below, private respondents'
Resolution 13 of 6 April 1995, petitioners filed the instant petition,
evidence even supports the view that VIVA is engaged in the
claiming that the NLRC committed grave abuse of discretion
business of making movies.
amounting to lack or excess of jurisdiction in: (1) finding that
petitioners were project employees; (2) ruling that petitioners were
not illegally dismissed; and (3) reversing the decision of the Labor We now turn to the critical issues. Private respondents insist that
Arbiter. petitioners are project employees of associate producers who, in
turn, act as independent contractors. It is settled that the contracting
out of labor is allowed only in case of job contracting. Section 8,
To support their claim that they were regular (and not project)
Rule VIII, Book III of the Omnibus Rules Implementing the Labor
employees of private respondents, petitioners cited their
Code describes permissible job contracting in this wise:
performance of activities that were necessary or desirable in the
usual trade or business of private respondents and added that their
work was continuous, i.e., after one project was completed they Sec. 8. Job contracting. — There is job contracting permissible
were assigned to another project. Petitioners thus considered under the Code if the following conditions are met:
themselves part of a work pool from which private respondents
drew workers for assignment to different projects. Petitioners
(1) The contractor carries on an independent business
lamented that there was no basis for the NLRC's conclusion that
and undertakes the contract work on his own account
they were project employees, while the associate producers were
under his own responsibility according to his own manner
independent contractors; and thus reasoned that as regular
and method, free from the control and direction of his
employees, their dismissal was illegal since the same was premised
employer or principal in all matters connected with the
on a "false cause," namely, the completion of a project, which was
performance of the work except as to the results thereof;
not among the causes for dismissal allowed by the Labor Code.
and

Private respondents reiterate their version of the facts and stress

(2) The contractor has substantial capital or investment in
that their evidence supports the view that petitioners are project
the form of tools, equipment, machineries, work premises,
employees; point to petitioners' irregular work load and work
and other materials which are necessary in the conduct of
schedule; emphasize the NLRC's finding that petitioners never
his business.
controverted the allegation that they were not prohibited from
working with other movie companies; and ask that the facts be
viewed in the context of the peculiar characteristics of the movie Assuming that the associate producers are job contractors, they
industry. must then be engaged in the business of making motion pictures.
As such, and to be a job contractor under the preceding description, (b) Labor-only contracting as defined herein is
associate producers must have tools, equipment, machinery, work hereby prohibited and the person acting as
premises, and other materials necessary to make motion pictures. contractor shall be considered merely as an
However, the associate producers here have none of these. Private agent or intermediary of the employer who shall
respondents' evidence reveals that the movie-making equipment be responsible to the workers in the same
are supplied to the producers and owned by VIVA. These include manner and extent as if the latter were directly
generators, 16 cables and wooden platforms, 17 cameras and employed by him.
"shooting equipment;" 18 in fact, VIVA likewise owns the trucks used
to transport the equipment. 19 It is thus clear that the associate
(c) For cases not falling under this Article, the
producer merely leases the equipment from VIVA. 20 Indeed, private
Secretary of Labor shall determine through
respondents' Formal Offer of Documentary Evidence stated one of
appropriate orders whether or not the
the purposes of Exhibit "148" as:
contracting out of labor is permissible in the
light of the circumstances of each case and
To prove further that the independent after considering the operating needs of the
Producers rented Shooting Unit No. 2 from Viva employer and the rights of the workers
to finish their films. 21 involved. In such case, he may prescribe
conditions and restrictions to insure the
protection and welfare of the workers.
While the purpose of Exhibits "149," "149-A" and "149-B" was:

As labor-only contracting is prohibited, the law considers the person

[T]o prove that the movies of Viva Films were
or entity engaged in the same a mere agent or intermediary of the
contracted out to the different independent
direct employer. But even by the preceding standards, the associate
Producers who rented Shooting Unit No. 3 with
producers of VIVA cannot be considered labor-only contractors as
a fixed budget and time-frame of at least 30
they did not supply, recruit nor hire the workers. In the instant case,
shooting days or 45 days whichever comes
it was Juanita Cesario, Shooting Unit Supervisor and an employee
first. 22
of VIVA, who recruited crew members from an "available group of
free-lance workers which includes the complainants Maraguinot and
Private respondent further narrated that VIVA's generators broke Enero." 24 And in their Memorandum, private respondents declared
down during petitioners' last movie project, which forced the that the associate producer "hires the services of . . . 6) camera
associate producer concerned to rent generators, equipment and crew which includes (a) cameraman; (b) the utility crew; (c) the
crew from another company. 23 This only shows that the associate technical staff; (d) generator man and electrician; (e) clapper; etc. . .
producer did not have substantial capital nor investment in the form . ." 25 This clearly showed that the associate producers did not
of tools, equipment and other materials necessary for making a supply the workers required by the movie project.
movie. Private respondents in effect admit that their producers,
especially petitioners' last producer, are not engaged in permissible
The relationship between VIVA and its producers or associate
job contracting.
producers seems to be that of agency, 26 as the latter make movies
on behalf of VIVA, whose business is to "make" movies. As such,
If private respondents insist that the associate producers are labor the employment relationship between petitioners and producers is
contractors, then these producers can only be "labor-only" actually one between petitioners and VIVA, with the latter being the
contractors, defined by the Labor Code as follows: direct employer.

Art. 106. Contractor or subcontractor. — . . . The employer-employee relationship between petitioners and VIVA
can further be established by the "control test." While four elements
are usually considered in determining the existence of an
There is "labor-only" contracting where the person employment relationship, namely: (a) the selection and engagement
supplying workers to an employer does not have of the employee; (b) the payment of wages; (c) the power of
substantial capital or investment in the form of tools, dismissal; and (d) the employer's power to control of the employee's
equipment, machineries, work premises, among others, conduct, the most important element is the employer's control of the
and the workers recruited and placed by such persons employee's conduct, not only as to the result of the work to be done
are performing activities which are directly related to the but also as to the means and methods to accomplish the
principal business of such employer. In such cases, the same. 27 These four elements are present here. In their position
person or intermediary shall be considered merely as an paper submitted to the Labor Arbiter, private respondents narrated
agent of the employer who shall be responsible to the the following circumstances:
workers in the same manner and extent as if the latter
were directly employed by him.
[T]he PRODUCER has to work within the limits
of the budget he is given by the company, for
A more detailed description is provided by Section 9, Rule VIII, as long as the ultimate finish[ed] product is
Book III of the Omnibus Rules Implementing the Labor Code: acceptable to the company . . .

Sec. 9. Labor-only contracting. — (a) Any person who The ensure that qualify films are produced by
undertakes to supply workers to an employer shall be the PRODUCER who is an independent
deemed to be engaged in labor-only contracting where contractor, the company likewise employs a
such person: Supervising PRODUCER, a Project accountant
and a Shooting unit supervisor. The Company's
(1) Does not have substantial capital or Supervising PRODUCER is Mr. Eric Cuatico,
investment in the form of tools, equipment, the Project accountant varies from time to time,
machineries, work premises and other and the Shooting Unit Supervisor is Ms.
materials; and Alejandria Cesario.

(2) The workers recruited and placed by such The Supervising PRODUCER acts as the eyes
person are performing activities which are and ears of the company and of the Executive
directly related to the principal business or Producer to monitor the progress of the
operations of the employer in which workers PRODUCER's work accomplishment. He is
are habitually employed. there usually in the field doing the rounds of
 inspection to see if there is any problem that continue to be effective until the completion of
the PRODUCER is encountering and to assist the same.
in threshing out the same so that the film
project will be finished on schedule. He
For your services you shall receive the
supervises about 3 to 7 movie projects
daily/weekly/monthly compensation of P812.50.
simultaneously [at] any given time by
coordinating with each film "PRODUCER". The
Project Accountant on the other hand assists During the term of this appointment you shall
the PRODUCER in monitoring the actual comply with the duties and responsibilities of
expenses incurred because the company wants your position as well as observe the rules and
to insure that any additional budget requested regulations promulgated by your superiors and
by the PRODUCER is really justified and by Top Management.
warranted especially when there is a change of
original plans to suit the tast[e] of the company
Very truly yours,
on how a certain scene must be presented to
make the film more interesting and more
commercially viable. (emphasis supplied). (an illegible signature)

VIVA's control is evident in its mandate that the end result must be CONFORME:
a "quality film acceptable to the company." The means and methods
to accomplish the result are likewise controlled by VIVA, viz., the
movie project must be finished within schedule without exceeding _________________
the budget, and additional expenses must be justified; certain
scenes are subject to change to suit the taste of the company; and Name of appointee
the Supervising Producer, the "eyes and ears" of VIVA and del
Rosario, intervenes in the movie-making process by assisting the
associate producer in solving problems encountered in making the Signed in the presence of:
film.
___________________
It may not be validly argued then that petitioners are actually subject
to the movie director's control, and not VIVA's direction. The director Notably, nowhere in the appointment slip does it appear that it was
merely instructs petitioners on how to better comply with VIVA's the producer or associate producer who hired the crew members;
requirements to ensure that a quality film is completed within moreover, it is VIVA's corporate name which appears on the
schedule and without exceeding the budget. At bottom, the director heading of the appointment slip. What likewise tells against VIVA is
is akin to a supervisor who merely oversees the activities of rank- that it paid petitioners' salaries as evidenced by vouchers,
and-file employees with control ultimately resting on the employer. containing VIVA's letterhead, for that purpose. 30

Moreover, appointment slips 28 issued to all crew members state: All the circumstances indicate an employment relationship between
petitioners and VIVA alone, thus the inevitable conclusion is that
During the term of this appointment you shall petitioners are employees only of VIVA.
comply with the duties and responsibilities of
your position as well as observe the rules and The next issue is whether petitioners were illegally dismissed.
regulations promulgated by your superiors and Private respondents contend that petitioners were project
by Top Management. employees whose employment was automatically terminated with
the completion of their respective projects. Petitioners assert that
The words "supervisors" and "Top Management" can only refer to they were regular employees who were illegally dismissed.
the "supervisors" and "Top Management" of VIVA. By commanding
crew members to observe the rules and regulations promulgated by It may not be ignored, however, that private respondents expressly
VIVA, the appointment slips only emphasize VIVA's control over admitted that petitioners were part of a work pool; 31 and, while
petitioners. petitioners were initially hired possibly as project employees, they
had attained the status of regular employees in view if VIVA's
Aside from control, the element of selection and engagement is conduct.
likewise present in the instant case and exercised by VIVA. A
sample appointment slip offered by private respondents "to prove A project employee or a member of a work pool may acquire the
that members of the shooting crew except the driver are project status of a regular employee when the following concur:
employees of the Independent Producers" 29 reads as follows:
1) There is a continuous rehiring of project employees even after
VIVA PRODUCTIONS, INC. cessation of a project; 32 and
16 Sct. Albano St.
Diliman, Quezon City
2) The tasks performed by the alleged "project employee" are vital,
necessary and indispensable to the usual business or trade of the
PEDRO NICOLAS Date: June 15, 1992 employer. 33

  However, the length of time during which the employee

was continuously re-hired is not controlling, but merely
APPOINTMENT SLIP serves as a badge of regular employment. 34

You are hereby appointed as SOUNDMAN for

the film project entitled "MANAMBIT". This
appointment shall be effective upon the
commencement of the said project and shall
In the instant case, the evidence on record shows that petitioner
Enero was employed for a total of two (2) years and engaged in at KAHIT AKO'Y 5/28/92 7/7/92 JERRY
least eighteen (18) projects, while petitioner Maraguinot was BUSABOS OHARA
employed for some three (3) years and worked on at least twenty-
three (23) projects. 35 Moreover, as petitioners' tasks involved, SIGAW NG PUSO 7/1/92 8/4/92 M. ONG
among other chores, the loading, unloading and
SIGAW (addl. 1/2) 8/15/92 9/5/92 M. ONG

FILM DATE DATE ASSOCIAT NGAYON AT 9/6/92 10/20/92 SANDY

STARTE COMPLETE E KAILANMAN STA.
D D PRODUCE MARIA
R

LOVE AT FIRST 1/3/90 2/16/90 MARIVIC While Maraguinot was a member of Shooting Unit III, which made
SIGHT ONG the following movies (Annex "4-A" of Respondents' Position Paper;
OR, 29):
PAIKOT-IKOT 1/26/90 3/11/90 EDITH
MANUEL FILM DATE DATE ASSOCIATE
STARTE COMPLETE PRODUCER
ROCKY & ROLLY 2/13/90 3/29/90 M. ONG D D
GUMAPANG KA SA 1/27/90 3/12/90 JUN CHING
PAIKOT-IKOT (addl. 3/12/90 4/3/90 E. MANUEL LUSAK
1/2)
PETRANG KABAYO 2/19/90 4/4/90 RUTH GRUTA
ROCKY & ROLLY 4/6/90 5/20/90 M. ONG LUSAK (2nd contract) 3/14/90 4/27/90 JUN CHING
(2nd contract) P. KABAYO (Addl 1/2 4/21/90 5/13/90 RUTH GRUTA
contract)
NARDONG 4/4/90 5/18/90 JUN
BADBOY 6/15/90 7/29/90 EDITH
TOOTHPICK CHING
MANUEL
BAKIT KAY TAGAL 6/26/90 10/20/90 E. MANUEL BADBOY (2nd contract) 7/30/90 8/21/90 E. MANUEL
NG SANDALI ANAK NI BABY AMA 9/2/90 10/16/90 RUTH GRUTA
A.B. AMA (addl 1/2) 10/17/90 11/8/90 RUTH GRUTA
BAKIT KAY TAGAL 8/10/90 9/23/90 E. MANUEL
A.B. AMA (addl 2nd 1/2) 11/9/90 12/1/90 R. GRUTA
(2nd contract)
BOYONG MANALAC 11/30/90 1/14/91 MARIVIC ONG
HINUKAY KO NA 9/6/90 10/20/90 JUN HUMANAP KA NG 1/20/91 3/5/91 EDITH
ANG LIBINGAN MO CHING PANGET MANUEL
H. PANGET(2nd 3/10/91 4/23/91 E. MANUEL
MAGING SINO KA 10/25/90 12/8/90 SANDY contract)
MAN STA.
B. MANALAC (2nd 5/22/91 7/5/91 M. ONG
MARIA
contract)
M. SINO KA MAN 12/9/90 1/22/91 SANDY S ROBIN GOOD (2nd 7/7/91 8/20/91 M. ONG
(2nd contract) contract)
PITONG GAMOL 8/30/91 10/13/91 M. ONG
NOEL JUICO 1/29/91 3/14/90 JUN P. GAMOL (2nd 10/14/91 11/27/91 M. ONG
CHING contract)
GREASE GUN GANG 12/28/91 2/10/92 E. MANUEL
NOEL JUICO (2nd 3/15/91 4/6/91 JUN
contract) CHING ALABANG GIRLS (1/2 3/4/92 3/26/92 M. ONG
contract)
ROBIN GOOD 5/7/91 6/20/91 M. ONG BATANG RILES 3/9/92 3/30/92 BOBBY
GRIMALT
UTOL KONG 6/23/91 8/6/91 JUN UTOL KONG 3/22/92 5/6/92 B. GRIMALT
HOODLUM # 1 CHING HOODLUM (part 2)
UTOL (addl. 1/2 5/7/92 5/29/92 B. GRIMALT
KAPUTOL NG 8/18/91 10/2/91 SANDY S. contract)
ISANG AWIT
MANDURUGAS (2nd 5/25/92 7/8/92 JERRY
contract) OHARA
DARNA 10/4/91 11/18/91 E. MANUEL
MAHIRAP MAGING 7/2/92 8/15/92 M. ONG
DARNA (addl. 1/2) 11/20/91 12/12/91 E. MANUEL POGI

MAGNONG REHAS 12/13/91 1/27/92 BOBBY arranging of movie equipment in the shooting area as
GRIMALT instructed by the cameramen, returning the equipment to
the Viva Films' warehouse, and assisting in the "fixing" of
M. REHAS (2nd 1/28/92 3/12/92 B. the lighting system, it may not be gainsaid that these
contract) GRIMALT tasks were vital, necessary and indispensable to the
usual business or trade of the employer. As regards the
HIRAM NA MUKHA 3/15/92 4/29/92 M. ONG underscored phrase, it has been held that this is
ascertained by considering the nature of the work
HIRAM (2nd 5/1/92 6/14/92 M. ONG performed and its relation to the scheme of the particular
contract) business or trade in its entirety. 36
A recent pronouncement of this Court anent project or work pool At this time, we wish to allay any fears that this decision unduly
employees who had attained the status of regular employees burdens an employer by imposing a duty to re-hire a project
proves most instructive: employee even after completion of the project for which he was
hired. The import of this decision is not to impose a positive and
sweeping obligation upon the employer to re-hire project
The denial by petitioners of the existence of a
employees. What this decision merely accomplishes is a judicial
work pool in the company because their
recognition of the employment status of a project or work pool
projects were not continuous is amply belied by
employee in accordance with what is fait accompli, i.e., the
petitioners themselves who admit that: . . .
continuous re-hiring by the employer of project or work pool
employees who perform tasks necessary or desirable to the
A work pool may exist although the workers in employer's usual business or trade. Let it not be said that this
the pool do not receive salaries and are free to decision "coddles" labor, for as Lao has ruled, project or work pool
seek other employment during temporary employees who have gained the status of regular employees are
breaks in the business, provided that the subject to the "no work-no pay" principle, to repeat:
worker shall be available when called to report
of a project. Although primarily applicable to
A work pool may exist although the workers in the pool do not
regular seasonal workers, this set-up can
receive salaries and are free to seek other employment during
likewise be applied to project workers insofar
temporary breaks in the business, provided that the worker shall be
as the effect of temporary cessation of work is
available when called to report for a project. Although primarily
concerned. This is beneficial to both the
applicable to regular seasonal workers, this set-up can likewise be
employer and employee for it prevents the
applied to project workers insofar as the effect of temporary
unjust situation of "coddling labor at the
cessation of work is concerned. This is beneficial to both the
expense of capital" and at the same time
employer and employee for it prevents the unjust situation of
enables the workers to attain the status of
"coddling labor at the expense of capital" and at the same time
regular employees. Clearly, the continuous
enables the workers to attain the status of regular employees.
rehiring of the same set of employees within
the framework of the Lao Group of Companies
is strongly indicative that private respondents The Court's ruling here is meant precisely to give life to the
were an integral part of a work pool from which constitutional policy of strengthening the labor sector, 40 but, we
petitioners drew its workers for its various stress, not at the expense of management. Lest it be
projects. misunderstood, this ruling does not mean that simply because an
employee is a project or work pool employee even outside the
construction industry, he is deemed, ipso jure, a regular employee.
In a final attempt to convince the Court that
All that we hold today is that once a project or work pool employee
private respondents were indeed project
has been: (1) continuously, as opposed to intermittently, re-hired by
employees, petitioners point out that the
the same employer for the same tasks or nature of tasks; and (2)
workers were not regularly maintained in the
these tasks are vital, necessary and indispensable to the usual
payroll and were free to offer their services to
business or trade of the employer, then the employee must be
other companies when there were no on-going
deemed a regular employee, pursuant to Article 280 of the Labor
projects. This argument however cannot defeat
Code and jurisprudence. To rule otherwise would allow
the workers' status of regularity. We apply by
circumvention of labor laws in industries not falling within the ambit
analogy the vase of Industrial-Commercial-
of Policy Instruction No. 20/Department Order No. 19, hence
Agricultural Workers Organization v. CIR [16
allowing the prevention of acquisition of tenurial security by project
SCRA 526, 567-568 (1966)] which deals with
or work pool employees who have already gained the status of
regular seasonal employees. There we
regular employees by the employer's conduct.
held: . . .

In closing then, as petitioners had already gained the status of

Truly, the cessation of construction activities at
regular employees, their dismissal was unwarranted, for the cause
the end of every project is a foreseeable
invoked by private respondents for petitioners' dismissal, viz.:
suspension of work. Of course, no
completion of project, was not, as to them, a valid cause for
compensation can be demanded from the
dismissal under Article 282 of the Labor Code. As such, petitioners
employer because the stoppage of operations
are now entitled to back wages and reinstatement, without loss of
at the end of a project and before the start of a
seniority rights and other benefits that may have
new one is regular and expected by both
accrued. 41 Nevertheless, following the principles of "suspension of
parties to the labor relations. Similar to the
work" and "no pay" between the end of one project and the start of
case of regular seasonal employees, the
a new one, in computing petitioners' back wages, the amounts
employment relation is not severed by merely
corresponding to what could have been earned during the periods
being suspended. [citing Manila Hotel
from the date petitioners were dismissed until their reinstatement
Co. v. CIR, 9 SCRA 186 (1963)] The
when petitioners' respective Shooting Units were not undertaking
employees are, strictly speaking, not separated
any movie projects, should be deducted.
from services but merely on leave of absence
without pay until they are reemployed. Thus we
cannot affirm the argument that non-payment of Petitioners were dismissed on 20 July 1992, at a time when
salary or non-inclusion in the payroll and the Republic Act No. 6715 was already in effect. Pursuant to Section 34
opportunity to seek other employment denote thereof which amended Section 279 of the Labor Code of the
project employment. 37 (emphasis supplied) Philippines and Bustamante v. NLRC, 42 petitioners are entitled to
receive full back wages from the date of their dismissal up to the
time of their reinstatement, without deducting whatever earnings
While Lao admittedly involved the construction industry, to which
derived elsewhere during the period of illegal dismissal, subject
Policy Instruction No. 20/Department Order No. 19 38 regarding
however, to the above observations.
work pools specifically applies, there seems to be no impediment to
applying the underlying principles to industries other than the
construction industry. 39 Neither may it be argued that a substantial WHEREFORE, the instant petition is GRANTED. The assailed
distinction exists between the projects undertaken in the decision of the National Labor Relations Commission in NLRC NCR
construction industry and the motion picture industry. On the CA No. 006195-94 dated 01 February 1995, as well as its
contrary, the raison d' etre of both industries concern projects with a Resolution dated 6 April 1995, are hereby ANNULLED and SET
foreseeable suspension of work. ASIDE for having been rendered with grave abuse of discretion,
and the decision of the Labor Arbiter in NLRC NCR Case No. 00-
07-03994-92 is REINSTATED, subject, however, to the modification
above mentioned in the computation of back wages.

No pronouncement as to costs. SO ORDERED.