IMBUIDO vs NLRC

Petitioner: Vivian Y. Imbuido

Respondents: NLRC, International Information Services
Inc and Gabriel Librando
Citation: GR No. 114734
Date of Promulgation: March 31, 2000
Ponente: Buena,J
FACTS:
Vivian Y. Imbuido employed as data encoder by
International Information Services, a domestic
corporation engaged in the business of data encoding
and keypunching, from August 26, 1998 to October
18, 1991
In the duration of her employment, Vivian entered into
13 separate employment contracts with the
respondent, each contract lasting only for a period of 3
months
Terms and Conditions of the Contract

a. This Contract is for a specific project/job

contract only and shall be effective for the period
covered as above-mentioned unless sooner
terminated when the job contract is completed
earlier or withdrawn by client, or when employee
is dismissed for just and lawful causes provided
by law. The happening of any of these events will
automatically
terminate
this
contract
of
employment.
b. Subject shall abide with the Company's rules
and regulations for its employees attached herein
to form an integral part hereof.
c. The nature of your job may require you to
render overtime work with pay so as not to disrupt
the Company's commitment of scheduled delivery
dates made on said job contract
September 1991: petitioner and 12 other employees
allegedly agreed to the filing of a petition for
certification election involving the rank-and-file
employees of the respondent
October 8, 1991: Lakas Manggagawa sa Pilipinas
(LAKAS) filed a petition for certification election with
the Bureau of Labor Relations
October 18, 1991: Vivian received a termination letter
from EDNA CASILAG, Administrative Officer, due to
low volume of work
May 25, 1992: Complaint for Illegal Dismissal with
prayer of SIL and 13th month differential pay with the
NLRC, NCR Arbitration Branch
Position Paper dtd August 3, 1992 (PETITIONER):
filed before LA Raul Aquino
- ALLEGATIONS:
1. Her employment was terminated not due to
the alleged low volume of work, but because
she signed a petition for certification election
among the rank-and-file employees of the
respondent, thus charging the respondent
with committing unfair labor practices
2. Non-payment of SIL and underpayment of the
13th month pay
July 16, 1992: Respondent filed its Position Paper
- ALLEGATIONS:
1. It had valid reasons to terminate petitioners
employment and disclaimed any knowledge of
the existence or formation of a union among
its rank and file employees at the time Vivians
services were terminated
2. Data encoding is on a project to project basis
only which usually lasts to 2-5 months
3. Petitioners employment was for a specific
period with specific period of engagement
4. The certainty of the expiration of Vivians
engagement has been determined at the time
of their engagement (until Nov 27, 1991) or

when the project is earlier competed OR when

the client withdraws
5. Claims for non-payment of overtime pay and
SIL are without factual and legal basis
LABOR ARBITER: ordered the reinstatement of
Vivian, without loss of seniority rights and privileges,
and the payment of back wages and SIL
- Regular employee for her job is usually necessary
or desirable in the usual business of the
respondent
- Low volume of work is not among the just causes
for termination of employment
NLRC: reversed the LA decision
- Regular employee
- Project employee has a tenurial security only up
to the time the specific project for which she was
hired is completed
- No valid basis in charging illegal dismissal for her
concomitant dislocation
January 11, 1994: MR denied
PetRev (Vivian)
1. CA committed grave abuse of discretion when it
ignored the findings of LA
2. She was a regular employee and not a project
employee
3. The termination of petition was taintd with unfair
labor practice
4. CA committed grave abuse of discretion in
remanding the awarded SIL for further arbitration
ISSUES:
1. W/N Vivian is a project employee
2. W/N Vivian is entitled for a Service Incentive
Leave
HELD:
1. YES. We agree with the findings of the NLRC that
petitioner is a project employee. The principal test for
determining whether an employee is a project employee
or a regular employee is whether the project employee
was assigned to carry out a specific project or
undertaking, the duration and scope of which were
specified at the time the employee was engaged for that
project. A project employee is one whose 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. In
the instant case, petitioner was engaged to perform
activities which were usually necessary or desirable in the
usual business or trade of the employer, as admittedly,
petitioner worked as a data encoder for private
respondent, a corporation engaged in the business of data
encoding and keypunching, and her employment was
fixed for a specific project or undertaking the completion or
termination of which had been determined at the time of
her engagement, as may be observed from the series of
employment contracts between petitioner and private
respondent, all of which contained a designation of the
specific job contract and a specific period of employment.
However, even as we concur with the NLRC's findings that
petitioner is a project employee, we have reached a
different conclusion. In the recent case of Maraguinot,
Jr. vs. NLRC, we held that "[a] project employee or a
member of a work pool may acquire the status of a regular
employee when the following concur:

1) There is a continuous rehiring of project

employees even after [the] cessation of a
project; and

is a project or work pool employee even outside

the construction industry, he is deemed, ipso jure,
a regular employee. All that we hold today is that
once a project or work pool employee has
been: (1)
continuously,
as
opposed
to
intermittently, re-hired by the same employer for
the same tasks or nature of tasks; and (2) these
tasks are vital, necessary, and indispensable to
the usual business or trade of the employer, then
the employee must be deemed a regular
employee, pursuant to Article 280 of the Labor
Code and jurisprudence. To rule otherwise would
allow circumvention of labor laws in industries not
falling within the ambit of Policy Instruction
No. Policy Department Order No. 19, hence
allowing the prevention of acquisition of tenurial
security by project or work pool employees who
have already gained the status of regular
employees
by
the
employer's
39
conduct. (emphasis supplied)

2) The tasks performed by the alleged "project

employee" are vital, necessary and indispensable
to the usual business or trade of the employer.
The evidence on record reveals that petitioner was
employed by private respondent as a data encoder,
performing activities which are usually necessary or
desirable in the usual business or trade of her employer,
continuously for a period of more than three (3) years,
from August 26, 1988 to October 18, 1991 36 and
contracted for a total of thirteen (13) successive projects.
We have previously ruled that "[h]owever, the length of
time during which the employee was continuously re-hired
is not controlling, but merely serves as a badge of regular
employment." 37Based on the foregoing, we conclude that
petitioner has attained the status of a regular employee of
private respondent.
At this point, we reiterate with emphasis that:
xxx

xxx

xxx

At this time, we wish to allay any fears that this

decision unduly burdens an employer by imposing
a duty to re-hire a project 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 employees. What this
decision merely accomplishes is a judicial
recognition of the employment status of a project
or work pool employee in accordance with what is
fait accompli, i.e., the continuous re-hiring by the
employer of project or work pool employees who
perform tasks necessary or desirable to the
employer's usual business or trade. Let it not be
said that this decision "coddles" labor, for
as Lao 38 has ruled, project or work pool
employees who have gained the status of regular
employees are subject to the "no work-no pay"
principle, to repeat:
A work pool may exist although the workers in the
pool do not receive salaries and are free to seek
other employment during temporary breaks in the
business, provided that the worker shall be
available when called to report for a project.
Although primarily applicable to regular seasonal
workers, this set-up can likewise be applied to
project workers insofar as the effect of temporary
cessation of work is concerned. This is beneficial
to both the employer and employee for it prevents
the unjust situation of "coddling labor at the
expense of capital" and at the same time enables
the workers to attain the status of regular
employees.
The Court's ruling here is meant precisely to give
life to the constitutional policy of strengthening the
labor sector, but, we stress, not at the expense of
management. Lest it be misunderstood, this ruling
does not mean that simply because an employee

Being a regular employee, petitioner is entitled to security

of tenure and could only be dismissed for a just or
authorized cause, as provided in Article 279 of the Labor
Code, as amended:
Art. 279. Security of Tenure - In cases of regular
employment, the employer shall not terminate the
services of an employee except for a just cause or
when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and
other privileges and to his full backwages,
inclusive of allowances, and to his other benefits
or their monetary equivalent computed from the
time his compensation was withheld from him up
to the time of his actual reinstatement.
The alleged causes of petitioner's dismissal (low volume
of work and belatedly, completion of project) are not valid
causes for dismissal under Articles 282 and 283 of the
Labor Code. Thus, petitioner is entitled to reinstatement
without loss of seniority rights and other privileges, and to
her full backwages, inclusive of allowances, and to her
other benefits or their monetary equivalent computed from
the time her compensation was withheld from her up to
the time of her actual reinstatement. However, complying
with the principles of "suspension of work" and "no work,
no pay" between the end of one project and the start of a
new one, in computing petitioner's backwages, the
amounts corresponding to what could have been earned
during the periods from the date petitioner was dismissed
until her reinstatement when private respondent was not
undertaking any project, should be deducted.
2. YES.
Art. 95 - Right to service incentive leave (a) Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave
of five days with pay.
xxx

xxx

xxx

Having already worked for more than three (3) years at

the time of her unwarranted dismissal, petitioner is

undoubtedly entitled to service incentive leave benefits,

computed from 1989 until the date of her actual
reinstatement. As we ruled in the recent case
of Fernandez vs. NLRC, "[s]ince a service incentive leave
is clearly demandable after one year of service - whether
continuous or broken - or its equivalent period, and it is
one of the "benefits" which would have accrued if an
employee was not otherwise illegally dismissed, it is fair
and legal that its computation should be up to the date of
reinstatement as provided under Section [Article] 279 of
the Labor Code, as amended, which reads:

Art. 279. Security of Tenure. - An employee who is unjustly

dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to
his full back wages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed
from the time his compensation is withheld from him up to
the time of his actual reinstatement." (emphasis supplied).