But Their Services were Coterminous with Their Assigned Projects

The employees in this case were hired on various dates by Sigma Construction and Supply (Sigma Construction), an independent contractor owned by Eduardo. As cement cutters, the said employees were assigned to work at the drilling site of Philippine Geothermal, Inc. (Philippine Geothermal), beginning in April 1990.

However, Philippine Geothermal preterminated one of its contracts with Sigma Construction on April 1, 1993. Due to such termination, the project manager of Sigma Construction issued a notice to all cement cutters, informing them that the contract with Philippine Geothermal will be effective only until April 30, 1993.

The employees filed a complaint for illegal dismissal against Sigma Construction and Philippine Geothermal. They argued that they were regular employees of Sigma Construction because they were continuously hired and assigned to different Philippine Geothermal projects from the beginning of their employment in 1990 until their recent termination in 1993. The employees added that they were even transferred to other projects prior to the completion of a previously assigned project and they also cleaned canals and pipes, fixed tools, and other related work at Philippine Geothermal.

Eduardo alleged that Sigma Construction was an independent contractor that hired project employees to work on its projects with Philippine Geothermal. In support of this stand, Eduardo presented Sigma Construction’s Service contracts with Philippine Geothermal. According to Eduardo, when Philippine Geothermal preterminated its latest contract with Sigma Construction, the latter was forced to dismiss its employees from employment their services were coterminous with Sigma Construction’s projects with Philippine Geothermal. Eduardo posited that it would be unjust to require Sigma Construction to retain employees in the absence of projects with Philippine Geothermal.

Are the employees here project employees of Sigma Construction?

The Supreme Court held that said employees were not project employees, but were regular employees of Sigma Construction.

The Court stated that the principal test in determining whether an employee is a project employee is whether he/she is assigned to carry out a “specific project or undertaking,” the duration and scope of which are specified at the time the employee is engaged in the project, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring.

In the present case, the Court found no proof that the employees’ engagement as project employees had been predetermined, as required by law. There was no showing that the employees were informed that they were to be assigned to a “specific project or undertaking” upon their hiring. No employment contracts for the specific project signed by the employees were presented.

The Court pointed out that Eduardo only presented Sigma Construction’s Service Contracts with Philippine Geothermal. According to the Court, nowhere in the contracts did it show that employees were parties to such contract. More importantly, the said documents did not prove that employees were hired for the projects with Philippine Geothermal.

For the Court, the presentation of service contracts between Sigma Construction and Philippine Geothermal (even if it showed the duration of the project), in lieu of the employees’ individual employment contracts, did not establish that the latter were project employees.

Further reading:

  • Jovero v. Cerio, G.R. No. 202466, June 23, 2021.
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