[Syllabus]

THIRDDIVISION

[G.R.No.114290.September9,1996]

RAYCORAIRCONTROLSYSTEMS,INC.,petitioner,vs.NATIONALLABORRELATIONSCOMMISSIONANDROLANDOLAYA,etal.,
respondents.
DECISION
PANGANIBAN,J.:
Wereprivaterespondents,employedbypetitionerinitsbusinessofinstallingairconditioningsystemsinbuildings,projectemployeesorregularemployees?And
were their dismissals "due to (petitioner's) present business status" and effective the day following receipt of notice legal? Where both the petitioner and the
respondentsfailtopresentsufficientandconvincingevidencetoprovetheirrespectiveclaims,howshouldthecasebedecided?
[1]
ThisCourtanswerstheforegoingquestionsinresolvingthispetitionforcertiorariassailingtheDecision promulgatedNovember29,1993bytheNationalLabor
[2]
[3]
RelationsCommission, whichsetasideandreversedthedecisionofthelaborarbiter dated22January1993,aswellasthesubsequentorderofrespondent
Commissiondenyingpetitioner'smotionforreconsideration.
TheFacts
Petitioner's sole line of business is installing airconditioning systems in the buildings of its clients. In connection with such installation work, petitioner hired
privaterespondentsRobertoFulgencio,RolandoLaya,FlorencioEspina,RomuloMagpili,RamilHernandez,WilfredoBrun,EduardoReyes,CrisostomoDonompili,
Angelito Realingo, Hernan Delima, Jaime Calipayan, Jorge Cipriano, Carlito de Guzman, Susano Atienza, and Gerardo de Guzman, who worked in various
capacities as tinsmith, leadman, aircon mechanic, installer, welder and painter. Private respondents insist that they had been regular employees all along, but
petitionermaintainsthattheywereprojectemployeeswhowereassignedtoworkonspecificprojectsofpetitioner,andthatthenatureofpetitioner'sbusinessmere
installation (not manufacturing) of aircon systems and equipment in buildings of its clients prevented petitioner from hiring private respondents as regular
employees.Asfoundbythelaborarbiter,theiraveragelengthofservicewithpetitionerexceededoneyear,withsomerangingfromtwotosixyears(butprivate
respondentsclaimmuchlongertenures,someallegedlyexceedingtenyears).
In1991,privaterespondentLayaandfourteenotheremployeesofpetitionerfiledNLRCNCRCaseNo.00030208092fortheir"regularization".Thiscase,was

[4]
dismissedonMay20,1992forwantofcauseofaction.
Ondifferentdatesin1992,theywereservedwithuniformlywordednoticesof"TerminationofEmployment"bypetitioner"duetoourpresentbusinessstatus",
whichterminationsweretobeeffectivethedayfollowingthedateofreceiptofthenotices.Privaterespondentsfelttheyweregiventheirwalkingpapersafterthey
refused to sign a "Contract Employment" providing for, among others, a fixed period of employment which "automatically terminates without necessity of further
notice"orevenearlieratpetitioner'ssolediscretion.
Becauseofthetermination,privaterespondentsfiledthreecasesofillegaldismissalagainstpetitioner,allegingthatthereasongivenfortheterminationoftheir
employmentwasnotoneofthevalidgroundsthereforundertheLaborCode.Theyalsoclaimedthattheterminationwaswithoutbenefitofdueprocess.
Thethreeseparatecasesfiledbyprivaterespondentsagainstpetitioner,docketedasNLRCNCR00030593092,NLRCNCR00050278992,andNLRCNCR
00070369992,weresubsequentlyconsolidated.Thepartiesweregivenopportunitytofiletheirrespectivememorandaandothersupplementalpleadingsbefore
thelaborarbiter.
OnJanuary22,1993,theLaborArbiterissuedhisdecisiondismissingthecomplaintsforlackofmerit.Hereasonedthattheevidenceshowedthattheindividual
[5]
complainants (private respondents) were project employees within the meaning of Policy Instructions No. 20 (series of 1977) of the Department of Labor and
Employment,havingbeenassignedtoworkonspecificprojectsinvolvingtheinstallationofairconditioningunitsascoveredbycontractsbetweentheiremployerand
thelatter'sclients.Necessarily, the installation of airconditioning systems "must come to a halt as projects come and go", and "(o)f consequence, the [petitioner]
cannothireworkersinperpetuity.Andasprojectemployees,privaterespondentswouldnotbeentitledtoterminationpay,separationpay,holidaypremiumpay,etc.
andneitheristheemployerrequiredtosecureaclearancefromtheSecretaryofLaborinconnectionwithsuchtermination.
PrivaterespondentsappealedtotherespondentNLRC,whichinitsNovember29,1993Decisionreversedthearbiter and found private respondents to have
beenregularemployeesillegallydismissed.TherespondentCommissionmadethefollowingfourparagraphdisquisition:
"Fromtheaboverules,itcaneasilybegleanedthatcomplainantsbelongtoaworkpoolfromwhichtherespondentcompanydrewitsmanpowerrequirements.Thisisbuttressedby
thefactthatmanyofthecomplainantshavebeenemployedforlongperiodsoftimealready.
Wedoubtrespondent'sassertionthatcomplainantswerereallyassignedtodifferentprojects.The'ContractEmployment'whichitsubmitted(seepp.3238,record)purportingto
showparticularprojectsarenotreliablenayevenappearstohavebeencontrived.Thenamesoftheprojectsclearlyappeartohavebeenrecentlytypewritten.Inthe'Contract
Employment'submittedbycomplainants(seep.65,record),nosuchnameofprojectappears.Verily,complainantswerenonprojectemployees.
Anentthedismissalofcomplainants,sufficeittostatethatthesamewascapriciousandwhimsicalasshownbythevaguereasonprofferedbyrespondentforsaiddismissalwhichis
'duetoourpresentbusinessstates'(shouldread'status')isundoubtedlynotoneofthevalidcausesforterminationofanemployment.Wearethusinclinedtogivecredenceto
complainants'allegationthattheywereeasedoutofworkfortheirrefusaltosigntheonesided'ContractEmployment.'
Thefactthatcomplainantsweredismissedmerelytospitethemismademoremanifestbyrespondent'sfailuretomakeareportofdismissalorsecureaclearancefromtheDepartment
ofLabor(seepp.196and197,record)asrequiredunderP.I.No.20andtheirpublicationofanadvertisementforreplacementsforthesamepositionsheldbycomplainants(seep.
298,record).Evenassumingthatcomplainantswereprojectemployees,theirunceremoniousdismissalcoupledwiththeattempttoreplacethemviathenewspaperadvertisement
entitlesthemtoreinstatementwithbackwagesunderP.I.,No.20."

Thedispositiveportionfollowedimmediatelyandread:
"WHEREFORE,theappealedDecisionisherebySETASIDEandanewoneenteredorderingrespondentto:
1.Immediatelyreinstatecomplainants(privaterespondents)totheirformerpositionswithoutlossofseniorityrightsandprivilegesand
2.Paythemfullbackwagesfromthetimetheyweredismisseduptothetimetheyareactuallyreinstated."
Petitioner'smotionforreconsiderationwasdeniedbypublicrespondentonFebruary23,1994forlackofmerit.Hence,thispetition.
Issues
Petitioner charges public respondent NLRC with grave abuse of discretion in finding private respondents to have been nonproject employees and illegally
dismissed,andinorderingtheirreinstatementwithfullbackwages.
Forclarity'ssake,letusrestatethepivotalquestionsinvolvedintheinstantcaseasfollows:whetherprivaterespondentswereprojectemployeesorregular
(nonproject)employees,andwhetherornottheywerelegallydismissed.
In support of its petition, petitioner reiterates the same points it raised before the tribunals below: that it is engaged solely in the business of installation of
airconditioningunitsorsystemsinthebuildingsofitsclients.Ithasnopermanentclientswithcontinuousprojectswhereitsworkerscouldbeassignedneitherisita
manufacturingfirm.Mostofitsprojectslastfromtwotothreemonths.(Theforegoingmatterswerenevercontrovertedbyprivaterespondents.)Thus,forpetitioner,
workis"notdoneinperpetuitybutnecessarilycomestoahaltwhentheinstallationofairconditioningunitsiscompleted."
Onthebasisoftheforegoing,petitionerassertsthatitcouldnothavehiredprivaterespondentsasanythingotherthanprojectemployees.Itfurtherinsiststhat"
(a)ttheincipienceofhiring,privaterespondentswereappraised(sic)thattheirworkconsistedonlyintheinstallationofairconditioningunitsandthatassoonasthe
installation is completed, their work ceases and that they have to wait for another installation projects (sic)." In other words, their work was coterminous with the
durationoftheproject,andwasnotcontinuousoruninterruptedasclaimedbythem.Petitioneralsoclaimsthattheprivaterespondentssignedprojectcontractsof
employmentindicatingthenamesoftheprojectsorbuildingstheyareworkingon.Andwhenbetweenprojects,thereprojectemployeeswerefreetoworkelsewhere
withotherestablishments.
Privaterespondentscontrovertedtheseassertionsofpetitioner,claimingthattheyhadworkedcontinuouslyforpetitionerforseveralyears,someofthemaslong
astenyears,andthus,byoperationoflawhadbecomeregularemployees.
TheCourt'sRuling
Ordinarily,thefindingsmadebytheNLRCareentitledtogreatrespectandareevenclothedwithfinalityanddeemedbindingonthisCourt,exceptthatwhen
suchfindingsarecontrarytothoseofthelaborarbiter,thisCourtmaychoosetoreexaminethesame,asweherebydointhiscasenor.

TheFirstIssue:ProjectEmployeesorRegularEmployees?
AnUnfoundedConclusion
We scoured the assailed Decision for any trace of arbitrariness, capriciousness or grave abuse of discretion, and noted that the respondent Commission first
citedthefactsofthecase,thenquotedpartofthearbiter'sdisquisitionalongwithrelevantportionsofPolicyInstructionsNo.20,afterwhichitimmediatelyleapttothe
conclusionthat"(F)romtheaboverules,itcaneasilybegleanedthatcomplainantsbelongtoaworkpoolfromwhichtherespondentcompanydrewitsmanpower
requirements.Thisisbuttressedbythefactthatmanyofthecomplainantshavebeenemployedforlongperiodsoftimealready."(underscoringsupplied)Byreason
ofsuch"finding",respondentNLRCconcludedthatprivaterespondentswereregular(notproject) employees, but failed to indicate the basis for such finding and
conclusion.Forourpart,wecombedtheDecisioninsearchofsuchbasis.However,repeatedscrutinyoftheprovisionsofPolicyInstructionsNo.20pertainingto
workpoolsmerelyraisedfurtherquestions.
"Membersofaworkpoolfromwhichaconstructioncompanydrawsitsprojectemployees,ifconsideredemployeesoftheconstructioncompanywhileinthework
pool, are nonproject employees or employees for an idefinite period. If they are employed in a particular project, the completion of the project or of any phase
thereofwillnotmeanseveranceofemployeremployeerelationship.
However,iftheworkersintheworkpoolarefreetoleaveanytimeandoffertheirservicestootheremployersthentheyareprojectemployeesemployedbya
constructioncompanyinaparticularprojectorinaphasethereof."
Acarefulreadingoftheaforequotedandprecedingprovisionsestablishesthefactthatprojectemployeesmayormaynotbemembersofaworkpool,(thatis,
the employer may or may not have formed a work pool at all), and in turn, members of a work pool could be either project employees or regular
employees.Intheinstantcase,respondentNLRCdidnotindicatehowprivaterespondentscametobeconsideredmembersofaworkpoolasdistinguishedfrom
ordinary(nonworkpool)employees.Itdidnotestablishthataworkpoolexistedinthefirstplace.Neitherdiditmakeanyfindingastowhetherthehereinprivate
respondents were indeed free to leave anytime and offer their services to other employers, as vigorously contended by petitioner, despite the fact that such a
determinationwouldhavebeencriticalindefiningtheprecisenatureofprivaterespondents'employment.Clearly,theNLRC'sconclusionofregularemploymenthas
nofactualsupportandisthusunacceptable.
ConclusionBasedonUnwarrantedAssumptionofBadFaith
Immediatelythereafter,respondentCommissiondeterminedwithoutsufficientbasisthatcomplainantswerenonprojectemployees.Wequote:
"Wedoubtrespondent's(petitioner's)assertionthatcomplainants(privaterespondents)werereallyassignedtodifferentprojects.The"ContractEmployment"whichitsubmitted(see
pp.3238,record)purportingtoshowparticularpojectsarenotreliablenayevenappearstohavebeencontrived.Thenamesoftheprojectsclearlyappeartohavebeenrecently
typewritten.Inthe'ContractEmployment'submittedbycomplainants(seep.65,record),nosuchnameofprojectappears.Verily,complainantswerenonprojectemployees."
(underscoringsupplied)

ThebasisforrespondentNLRC'sstatementthatthecontractswerecontrivedwasthefactthatthenamesofprojectsclearlyappearedtohavebeentypedinonly
[6]
afterthecontractshadbeenprepared.However,ourexaminationofthecontracts(presentedbypetitionerasAnnexes"A","B","B1","C","D","E"and"F" toits
PositionPaperdatedJuly30,1992filedwiththelaborarbiter)didnotleadinexorablytotheconclusionthatthesewere"contrived".SaidAnnexeswerephotocopies
[7]
of photocopies of the original "Contract Employments", and the names of projects had been typed onto these photocopies, meaning that the originals of said
contractsprobablydidnotindicatetheprojectnames.Butthisalonedidnotautomaticallyornecessarilymeanthatpetitionerhadcommittedanyfalsehoodorfraud,
orhadanyintenttodeceiveorimposeuponthetribunalsbelow,becausethenamesoftheprojectscouldhavebeentyped/filledingoodfaith,nuncprotunc,inorder
tosupplythedatawhichoughttohavebeenindicatedintheoriginalsatthetimethosewereissued,butwhichforsomereasonorotherwereomitted.Inshort,the
namesofprojectscouldhavebeenfilledinsimplyinordertomakethecontractsspeakthetruthmoreclearlyorcompletely.Notably,noreasonwasadvancedfor
notaccordingthepetitionerthepresumptionofgoodfaith.RespondentNLRC,then,madeanunwarrantedassumptionthatbadfaithandfraudulentintentattended
thefillinginoftheprojectnamesinsaidAnnexes.Inanyevent,itcanbeeasilyandclearlyestablishedwiththeuseofthenakedeyethatthedatesanddurationsof
the projects and/or work assignments had been typed into the original contracts, and therefore, petitioner's failure to indicate in the originals of the contracts the
name(s)oftheproject(s)towhichprivaterespondentswereassigneddoesnotnecessarilymeanthattheycouldnothavebeenprojectemployees.(Incidentally,we
shouldmakementionherethatwhatisorisnotstatedinacontractdoesnotcontrolnorchangetheJuridicalnatureofanemploymentrelationshipsincethesameis
determinedandfixedbylaw.Asamatteroffact,wenotethatthereisnorequirementinPolicyInstructionsNo.20thatprojectemployeesshouldbeissuedwritten
contractsofemployment,letalonethatawrittencontractshouldindicatethenameoftheprojecttowhichtheemployeeconcernedisbeingassigned.)
StatutoryBasisforDeterminingNatureofEmployment
Thepartiesandtheirrespectivecounsel,aswellasrespondentCommissionandtheSolicitorGeneral,shouldhaverereadandcarefullystudiedALUTUCPvs.
[8]
NationalLaborRelationsCommission, whichishighlyinstructionalonthisquestion:
"ThelawonthematterisArticle280oftheLaborCodewhichreadsinfull:
'Article280.RegularandCasualEmploymentTheprovisionsofthewrittenagreementtothecontrarynotwithstandingandregardlessoftheoralagreementoftheparties,an
employmentshallbedeemedtoberegularwheretheemployeehasbeenengagedtoperformactivitieswhichareusuallynecessaryordesirableintheusualbusinessortradeofthe
employer,exceptwheretheemploymenthasbeenfixedforaspecificprojectorundertakingthecompletionorterminationofwhichhasbeendeterminedatthetimeofthe
engagementoftheemployeeorwheretheworkorservicestobeperformedisseasonalinnatureandtheemploymentisforthedurationoftheseason.
Anemploymentshallbedeemedtobecasualifitisnotcoveredbytheprecedingparagraph:Provided,That,anyemployeewhohasrenderedatleastoneyearofservice,whether
suchserviceiscontinuousorbroken,shallbeconsideredaregularemployeewithrespecttotheactivityinwhichheisemployedandhisemploymentshallcontinuewhilesuch
activityexists.'xxx
xxxxxxxxx
xxxFor,asisevidentfromtheprovisionsofArticle280oftheLaborCode,quotedearlier,theprincipaltestfordeterminingwhetherparticularemployeesareproperlycharacterized

as'projectemployees'asdistinguishedfrom'regularemployees,'iswhetherornotthe'projectemployees'wereassignedtocarryouta'specificprojectorundertaking,'theduration
(andscope)ofwhichwerespecifiedatthetimetheemployeeswereengagedforthatproject.(underscoringours)
Intherealmofbusinessandindustry,wenotethat'project'couldrefertoxxxaparticularjoborundertakingthatiswithintheregularorusualbusinessoftheemployercompany,but
whichisdistinctandseparate,andidentifiableassuch,fromtheotherundertakingsofthecompany.Suchjoborundertakingbeginsandendsatdeterminedordeterminabletimes.
Thetypicalexampleofthisxxxtypeofprojectisaparticularconstructionjoborprojectofaconstructioncompany.Aconstructioncompanyordinarilycarriedouttwoormore
discreteidentifiableconstructionprojects:e.g.,atwentyfive.storyhotelinMakatiaresidentialcondominiumbuildinginBaguioCityandadomesticairterminalinIloiloCity.
Employeeswhoarehiredforthecarryingoutofoneoftheseseparateprojects,thescopeanddurationofwhichhasbeendeterminedandmadeknowntotheemployeesatthetimeof
employment,areproperlytreatedas'projectemployees,'andtheirservicesmaybelawfullyterminatedatcompletionoftheproject."
[9]
Thesamedecisiongoesontosay:
"xxxThesimplefactthattheemploymentofpetitionersasprojectemployeeshadgonebeyondone(1)year,doesnotdetractfrom,orlegallydissolve,theirstatusasproject
employees.ThesecondparagraphofArticle280oftheLaborCode,quotedabove,providingthatanemployeewhohasservedforatleastone(1)year,shallbeconsideredaregular
employee,relatestocasualemployees,nottoprojectemployees.
InthecaseofMercado,Sr.vs.NationalLaborRelationsCommission(201SCRA332[1991]),thisCourtruledthattheprovisointhesecondparagraphofArticle280relatesonlyto
casualemployeesandisnotapplicabletothosewhofallwithinthedefinitionofsaidArticle'sfirstparagraph,i.e..projectemployees.xxx"
Incidentally,weshouldmentionthatbothrespondentCommissionandtheSolicitorGeneralwereinerrorinconcludingbasedonprivaterespondents'claimed
lengthofemployment(allegedlyforovertenyears)thattheywereregularemployees.Sadtostate,theSolicitorGeneralinhisargumentstriedto"forcefit"private
respondentsintothe"regularemployee"categoryandcompletedlydisregardedthecriticaldistinctionssetforthinALUTUCPandearliercases.
InconclusiveEvidence
Basedontheforegoingconsiderations,itispatentthat,intheinstantcase,thereneedstobeafindingastowhetherornotthedurationandscopeoftheproject
orprojectsweredeterminedorspecifiedandmadeknowntohereinprivaterespondentsatthetimeoftheirengagement.Thelaborarbitertriedtodothis,relying
[10]
heavilyonthe"Contract(s)Employment"presentedinpetitioner'sAnnexesaswellasonprivaterespondents'ownAnnex"A"
attachedtotheirPositionPaper,
andcitingthefactthatthesaidcontractsofemploymentindicatedthedurationoftheprojectstowhichtheprivaterespondentshadbeenassigned.Hethenheldthat
[11]
"(t)hereisnodenialthatcomplainantswereassignedtoworkintheseprojects,"
andconcludedthattheywereindeedprojectemployees.
But the arbiter completed ignored the fact that all the "Contract(s) Employment" presented in evidence by both petitioner and private respondents had been
signedonlybypetitioner'spresidentandgeneralmanager,LuisF.Ortega,butnotbytheemployeesconcerned,whohadpreciselyrefusedtosignthem.Thesaid
contractsthereforecouldinnowisebedeemedconclusiveevidence.Thus,privaterespondentsfaultedthelaborarbiterforgivingcredenceandprobativevalueto
said contracts. Besides, they claimed, only seven contracts in all were presented in evidence, pertaining to seven individual employees, while there are fifteen

employeesinvolvedinthecomplaints.Moreover,thesecontracts,purportedlyissuedeitherinJulyorDecemberof1991,exceptforonedatedMay1992),wereall
oneshot contracts of short duration, the longest being for about five months. Now, inasmuch as petitioner had not denied nor rebutted private respondents'
allegationsthattheyhadeachworkedseveralyearsforthepetitioner,theobviousquestionis,whydidn'tpetitionerproduceinevidencesimilarcontractsforallthe
otheryearsthatprivaterespondentshadworkedasprojectemployees?Tothesepoints,petitionerofferednoexplanationwhatsoever.
FailuretoDischargeBurdenofProof
Forthatmatter,itseemsselfevidenttothisCourtthat,evenifthecontractspresentedbypetitionerhadbeensignedbytheemployeesconcerned,still,they
wouldnotconstituteconclusiveproofofpetitioner'sclaim.Afterall,intheusualschemeofthings,contracttermsarenormallydictatedbytheemployerandsimply
accededtoandacceptedbytheemployee,whomaybedesperateforworkandthereforeinnopositiontobargainfreelyornegotiatetermstohisliking.
Inanyevent,petitionerinthiscaseundoubtedlycouldhavepresentedadditionalevidencetobuttressitsclaim.Forinstance,petitionercouldhavepresented
copies of its contracts with its clients, to show the time, duration and scope of past installation projects. The data from these contracts could then have been
[12]
correlatedtothedatawhichcouldbefoundinpetitioner'spayrollrecordsfor,letussay,thepastthreeyearsorso,
toshowthatprivaterespondentshadbeen
workingintermittentlyasandwhentheywereassignedtosaidprojects,andthattheircompensationhadbeencomputedonthebasisofsuchwork.Butpetitionerdid
notproducesuchadditionalevidence,andwefindthatitfailedtodischargeitsburdenofproof.
ItisnotsomuchthatthisCourtcannotappreciatepetitioner'scontentionsaboutthenatureofitsbusinessanditsinabilitytomaintainalargeworkforceonits
permanentpayroll.Privaterespondentshaveadmittedthatpetitionerisengagedonlyintheinstallation(notmanufacture)ofairconsystemsorunitsinbuildings,and
sincesuchalineofbusinesswouldobviouslybehighly(ifnotwholly)dependentontheavailabilityofbuildingsorprojectsrequiringsuchinstallationservices,which
factornobusinessman,nomatterhowsavvy,canaccuratelyforecastfromyeartoyear,itcanbeeasilysurmisedthatpetitioner,awarethatitsrevenuesandincome
wouldbeunpredictable,wouldalwaystrytokeepitsoverheadcoststoaminimum,andwouldnaturallywanttoengageworkersonaperprojectorperbuildingbasis
only,retainingveryfewemployees(ifany)onitspermanentpayroll.Itwouldalsohavebeenmorethangladifitsemployeesfoundotheremploymentelsewhere,in
betweenprojects.Toourmind,itappearsratherunlikelythatpetitionerwouldkeepprivaterespondentsallfifteenofthemcontinuouslyonitspermanentpayroll
for, say, ten or twelve years, knowing fully well that there would be periods (of uncertain duration) when no project can be had.To illustrate, let us assume that
privaterespondents(whowereeachmakingaboutP118.00toP119.50perdayin1991)werepaidonlyP100.00perday.Ifthefifteenwere,astheyclaimed,regular
employees entitled to their wages regardless of whether or not they were assigned to work on any project, the overhead for their salaries alone computed at
P100.00/day for 30 days in a month would come to no less than P45,000.00 a month, or P540,000.00 a year, not counting 13th month pay, Christmas bonus,
SSS/Medicarepremiumpayments,sickleavesandserviceincentivesleaves,andsoforth.Evenifpetitionermayhavebeenabletoaffordsuchoverheadcosts,it
certainlydoesnotmakebusinesssenseforitoranyoneelsetodoso,andisineverysensecontrarytohumannature,nottomentioncommonbusinesspractice.On
this score alone, we believe that petitioner could have made out a strong case. Which is why we have difficulty understanding its failure to present clear and
[13]
convincingevidenceonthispoint,itbeingdoctrinalthatinillegaldismissalcases,theemployeralwayshastheburdenofproof.
Petitioner'sproblemofweakevidencewasfurthercompoundedbycertaindocumentaryevidenceintherecordsbelowwhichcontrovertedpetitioner'sposition,
or,attheveryleast,tendedtoconfuseratherthanclarifymatters.Forinstance,wenotedthatintheirMemorandumofAppealdatedFebruary17,1993filedwiththe
respondentCommission,hereinprivaterespondentshadattachedasannexestheretothefollowingdocuments:
1. As Annex "B" thereof, a Certification dated January 28, 1992, signed by one Flora P. Perez, Administrative/Accountant of Raycor, certifying that "x x x Mr. Roberto B.

Fulgencio(oneoftheprivaterespondents)hasbeenconnectedwiththeundersignedcorporation(Raycor)fromAugust22,1986toMay18,1991andSeptember01,1990
toJanuary25,1992asAirconInstaller"
2.AsAnnex"C"thereof,aCertificationdatedMay7,1985,signedbyLuisF.Ortega,PresidentandGeneralManagerofhereinpetitionercorporation,totheeffectthat"xxx
Mr.JaimeCalipayan(anotheroneoftheprivaterespondents)hasbeenconnectedwiththeundersignedcorporationfromJune18,1982uptopresentasaMechanical
Installerand
3.AsAnnex"D"thereof,aCertificationdatedJune06,1991,likewisesignedbyLuisG.Ortega,presidentandgeneralmanagerofRaycor,certifyingthat"xxxMr.SusanoA.
Atienza (still another of the private respondents) has been connected with the undersigned corporation from October 10, 1983 up to present as Aircon
Mechanic/Technician".

Understandably,privaterespondentsmadebigcapitaloutofthesecertifications.But,whilepetitionerfailedutterlytoofferrebuttingevidence,stillandall,weare
notpreparedtoconcludeonthebasisofthesecertificationsalonethatprivaterespondentswereindeedregularemployees.Firstofall,saidcertificationsreferonly
tothreeoutofthefifteenprivaterespondents,sowhatcouldbetrueofthemmaynotnecessarilyapplywithrespecttotheothertwelve.Moreover,thecertifications
do not categorically state that the three employees had been permanent employees of Raycor. In other words, they do not necessarily overturn petitioner's
contentionthat privaterespondentswereprojectemployees, since it is still possible to read the documents a saying that the named employees were working as
projectemployeesduringtheperiodsthereinspecified.Thisisespeciallysosincethesaidcertificationswerepreparedbynonlawyerswhoinalllikelihoodwerenot
awareofthepotentiallegalimplicationsandramificationsofwhatwereostensiblyinnocuouscertifications.Asheldinonerecentcase,"xxxitishowevernotdifficult
tounderstandthatordinarybusinessactivitiesareperformedinthenormalcoursewithoutanticipationnorforeknowledgeoflitigation,oftenwithdispatchandusually
[14]
withaminimumofdocumentation.
Nonetheless,allthingsconsidered,thecertifications,issuedbypetitioneritself,tendtoputitsclaimsinseriousdoubt.
The situation was still further aggravated by the manner in which petitioner dismissed private respondents.As found by respondent Commission, the reason
givenforthedismissals,i.e.,"duetoourpresentbusinessstatus,"isvague,tosaytheleast,andunarguablyisnotoneofthevalidorjustcausesprovidedbylawfor
terminationofanemployment,whateveritsclassification.Butmoresignificantlyifindeedprivaterespondentswereprojectemployees,therewouldhavebeenno
need to terminate them by sending them notices of termination, inasmuch as their employment ceases "as a result of the completion of the project or any phase
thereof in which they are employed," per Policy Instruction No. 20 itself. Thus, if petitioner resorted to such dismissals, there is the unavoidable inference that
petitionerregardedtheprivaterespondentsasregularemployeesafterall.Butagain,thisisinconclusive,sincethenoticesofterminationweresigned,andinall
likelihoodprepared,bythepresidentandgeneralmanagerofpetitioner,probablysansanylegaladviceorawarenessoftheimplicationsofsuchamove.
Alltheaforesaidconflictingdatahavetheneteffectofcastingdoubtuponandcloudingtherealnatureoftheprivaterespondents'employmentstatus.Andwe
aremandatedbylawtoresolvealldoubtsinfavoroflabor.Forwhichreason,weherebyholdthatprivaterespondentswereregularemployeesofthepetitioner.
HavingarrivedatbasicallythesameresultsasrespondentNLRCwithrespecttoprivaterespondents'employmentstatus,didthisCourtwasteitstimeandeffort
inreexaminingtheinstantcase?Theanswerisinthenegative,thisCourtcannotaffirmadecisionorjudgmentbasedonerroneousfindingsandconclusions,for
justicecanneverbeadequatelydispensedtoallpartiesifajudgmentisnotgroundedonthetruth.
SecondIssue:TerminationsIllegal
Onthesecondissueofallegedillegalityofthesubjectdismissals,weagreewithrespondentCommissionwhenitheld,asmentionedabove,that"thesamewas

capriciousandwhimsicalasshownbythevaguereasonprofferedbyrespondentforsaiddismissalwhichis'duetoourpresentbusinessstates'(shouldread'status')
is undoubtedly not one of the valid causes for termination of an employment." True indeed, for neither trhe Labor Code nor Policy Instructions No. 20 allows
terminationonsuchground.EvenArt.283oftheLaborCodeasamended,whichtreatsofretrenchmentsandclosuresduetobusinesslosses,requiresthatthe
employerfirstservewrittennoticeontheworkersandtheDepartmentofLaboratleastonemonthbeforetheintendeddatethereofandincertaincases,separation
[15]
paymustbepaid.Anditcannotbedeniedthatintheinstantcase,petitionerdidnotaffordthemdueprocessthruthetwinrequirementsofnoticeandhearing,
as
theterminationstookeffectthedayfollowingreceiptofthenoticesoftermination.Ineluctably,thesaidterminationsarenotinaccordancewithlawandtherefore
illegal.
[16]
Ontopofthat,thereisevidenceofthebadfaithofpetitionerinterminatingtheprivaterespondents.Petitionerplacedanad
intheclassifiedadssectionof
[17]
thePeople'sJournal,sometimeinJune1992
whichread:
"WANTEDIMMEDIATELY
MECHANICALINSTALLERS
TINSMITHS
WELDERS/PIPEFITTERS

APPLYINPERSON:
RAYCORAIRCONTROL
SYSTEMS,INC.
RM30620THCENTURYBLDG.
632SHAWBLVD.,MAND.
METROMANILA"
Unmistakably, petitioner, in placing the ad, must have had at least one project, maybe more, "in the pipeline" at that time, and was clearly in need of
replacementsforprivaterespondentswhomithadjustfired.Thus,thedismissalscouldhardlyhavebeenduetoavalidcause,notevenduetopetitioner'salleged
"presentbusinessstatus".Onthiscountaswell,thedismissalswereillegal.
Andlastly,weshouldmentionthatanorderforreinstatementwithpaymentofbackwagesmustbebasedonthecorrectpremises.Thispointisbestillustratedby
consideringthelastratiocinationutilizedbypublicrespondent:"Evenassumingthatcomplainantswereprojectemployees,theirunceremoniousdismissalcoupled
withtheattempttoreplacethemviathenewspaperadvertisemententitlesthemtoreinstatementwithbackwagesunderP.I.No.20."Thereisaworldofdifference
betweenreinstatementasprojectemployeesandreinstatementasregularemployees,butthedifferencewasobviouslylostontherespondentNLRC.
Conclusion
WereiteratethatthisCourtwadedthroughtherecordsofthiscasesearchingforsolidevidenceuponwhichtodecidethecaseeitherway.Butalltold,neither
partymanagedtomakeoutaclearcase.Therefore,consideringthatinillegaldismissalcases,theemployeralwayshastheburdenofproof,andconsideringfurther
thatthelawmandatesthatalldoubts,uncertainties,ambiguities,andinsufficienciesberesolvedinfavoroflabor,weperforceruleagainstpetitionerandinfavorof

privaterespondents.
WHEREFORE,theforegoingconsidered,theassailedDecisionisherebySETASIDEandanewonerenderedholdingthatpetitionerhadfailedtodischargeits
burdenofproofintheinstantcaseandthereforeORDERINGthereinstatementofprivaterespondentsasregularemployeesofpetitioner,withoutlossofseniority
rightsandprivilegesandwithpaymentofbackwagesfromthedaytheyweredismisseduptothetimetheyareactuallyreinstated.Nocosts.
SOORDERED.
Narvasa,C.J.(Chairman),Davide,Jr.,Melo,andFrancisco,JJ.,concur.
[1]
[2]
[3]
[4]
[5]

Rollo,pp.3442.
FirstDivision,composedofComm.VicenteS.E.Veloso,ponente,andPres.Cormn.BartolomeS.CaraleandComm.AlbertoR.Quimpo,concurring.
OswaldB.Lorenzo.
Rollo,p.24.

PolicyInstructionsNo.20(seriesof1977),entitled"StabilizingEmployerEmployeeRelationsintheConstructionIndustry",providesinrelevantpart:
"Intheinterestofstabilizingemployeremployeerelationsintheconstructionindustryandtakingintoconsiderationitsuniquecharacteristics,thefollowingpolicyinstructionsareherebyissued
fortheguidanceofallconcerned:
Generally,therearetwotypesofemployeesintheconstructionindustry,namely:1)Projectemployees,and2)NonProjectemployees.
Project employees are those employed in connection with a particular construction project.Nonproject employees are those employed by a construction company without reference to any
particularproject.
Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular construction company.Moreover, the company is not required to obtain a clearance from the Secretary of Labor in connection with such
termination.WhatisrequiredofthecompanyisareporttothenearestPublicEmploymentOfficeforstatisticalpurposes.
IfaconstructionprojectoranyphasethereofhasadurationofmorethanoneyearandaProjectemployeeisallowedtobeemployedthereinforatleastoneyear,suchemployeemaynotbe
terminateduntilthecompletionoftheprojectorofanyphasethereofinwhichheisemployedwithapreviouswrittenclearancefromtheSecretaryofLabor.Ifsuchanemployeeisterminatedwithouta
clearancefromtheSecretaryofLabor,heshallbeentitledtoreinstatementwithbackwages.
Theemployeesofaparticularprojectarenotterminatedatthesametime.Somephasesoftheprojectarecompletedaheadofothers.Forthisreason,thecompletionofaphaseoftheProject
isthecompletionoftheprojectforanemployeeemployedinsuchphase.Inotherwords,employeesterminateduponthecompletionoftheirphaseoftheprojectarenotentitledtoseparationpayand
exemptfromtheclearancerequirement.
Ontheotherhand,thoseemployedinaparticularphaseofaconstructionprojectarealsonotterminatedatthesametime.Normally,lessandlessemployeesarerequiredasthephasedrawscloserto
completion. Project employees terminated because their services are no longer needed in their particular phase of the project are not entitled to separation pay and are exempt from the clearance
requirement,providedtheyarenotreplaced.Iftheyarereplaced,theyshallbeentitledtoreinstatementwithbackwages.
Members of a work pool from which a construction company draws its project employees, if considered employees of the construction company while in the work pool, are nonproject
employees or employees for an indefinite period. If they are employed in a particular project, the completion of the project or of any phase thereof will not mean severance of employeremployee
relationship.
However, if the workers in the work pool are free to leave anytime and offer their services to other employers then they are project employees employed by a construction company in a
particularprojectorinaphasethereof.
Generally,therearethree(3)typesofnonprojectemployees:first,probationaryemployeessecond,regularemployeesandthird,casualemployees.
Probationaryemployeesarethosewho,uponthecompletionoftheprobationaryperiod,areentitledtoregularization.Regularemployeesarethosewhohavecompletedtheprobationaryperiod
orthoseappointedtofillupregularpositionsvacatedasaresultofdeath,retirement,resignation,orterminationoftheregularholderthereof.Ontheotherhand,casualemployeesarethoseemployed
forashorttermdurationtoperformworknotrelatedtothemainlineofthebusinessoftheemployer.

xxxxxxxxx.
PolicyInstructionsNo.20wassubsequentlysupersededbyDepartmentOrderNo.19(seriesof1993)datedApril1,1993oftheDepartmentofLaborandEmployment.
[6]
Records,pp.3238.
[7]
Belowisasampleofa"ContractEmployment"(fromRecords,p.36):

RAYCORAIRCONTROLSYSTEMS,INC.,
Rms.30630720thCenturyBldg.,632ShawBlvd.
Mandaluyong,Rizal
NOTE:Pleasereturnwithyoursignature.
CONTRACTEMPLOYMENT
September01,1991
TO:FULGENCIOROBERTO
Youareherebyhiredas,aContractEmployee/worker,subjecttothefollowingconditions:
1)YouremploymentcommencesonSeptember01,1991andshallbeeffectiveonlyforthedurationofthecontractatFarEastBank&TrustCo.aftercompletionofwhichonJanuary,
1992itautomaticallyterminateswithoutnecessityoffurthernoticeprovided,however,thatitisexpresslyunderstoodthattheCompany,atitssolediscretion,mayterminatesaidemploymentatany
timeevenbeforecompletionofaforesaidcontractjob
2)Sinceyouremploymentiscontractualinnature,youmaybeterminatedatanytimewithoutnecessityofpriornoticeorterminalpay
3)YouareobligedtoservetheCompanyduringthefulldurationofthecontractunlessyourservicesareearlierterminatedasprovidedinparagraph1hereof
4)YourwagesshallbeattherateofP118.00perday

Iftheabovetermsareacceptable,pleasesignyourconformitytherewith.

RAYCORAIRCONTROLSYSTEMS,INC.
BY:
LUISF.ORTEGA
President&.GeneralManager
IcertifythatIhavereadandfullyunderstoodtheabovetermsandconditionsofemploymentandthatIagreeandabidebythem.
FULGENCIOROBERTO
Employee
Project:
FarEastBank&TrustCo.
(BalayanBranch)including
NationalBookstoreInc.
C.E.NO._____
[8]
234SCRA678,683685,August2,1994.
[9]
Ibid.,p.688.
[10]
Records,p.65.ThisAnnex"A"isexactlythesamecontractformaspetitioner'sAnnexes"A"to"F".
[11]
Thisfindingwasneverchallengedbytheprivaterespondents.
[12]
After all, every employer is required by law (Section 12 in relation to Section 6 of Rule X, Book III of the Omnibus Rules Implementing the Labor Code) to preserve its payroll and employment
recordsforatleastthreeyearsfromthedateofthelastentryinsuchrecords.

[13]
[14]
[15]

SeeGoldenDonuts,Inc.vs.NLRC,230SCRA153,February21,1994,andMapalovs.NLRC,233SCRA266,June17,1994.
MGGMarineServices,Inc.,etal.,vs.NLRC,etal.,G.R.No.114313,July29,1996,atp.25.

MGGMarineServices,Inc.vs.NLRC,supra,atpp.1517,citingKwikwayEngineeringWorksvs.NLRC,195SCRA526,March22,1991,andPepsiColaBottlingCo.vs.NLRC,210SCRA277,
June23,1992.
[16]
Records,p.198.
[17]
Themachinecopyoftheaddoesnotindicatethedateoredition/issuenumberofthenewspaper,butitcanbeinferredfromotherarticlesappearingonthesamepagethattheparticulareditionin
whichtheadappearedmusthavebeenpublishedbetweenMay27andJune12,1992,sometimeafterprivaterespondentshereinwereterminatedbypetitioner.