Kiamco vs. NLRC, PNOC & PNOC-EDC GRN 129449 June 29, 1999 J.

Bellosillo Facts: Private respondent

PHILIPPINE NATIONAL OIL COMPANY (PNOC), through its PNOC-ENERGY DEVELOPMENT CORPORATION
(PNOCEDC), hired petitioner Cisell Kiamco as a project employee in its Geothermal Agro-Industrial Plant
Project in Valencia, Negros Oriental. The Contract of Employment was for a period of five (5) months
from 1 July 1992 to 30 November 1992. After the termination of the contract, a second one was entered
into by the parties for the period starting 1 December 1992 to 30 April 1993. Thereafter, Kiamco was
again re-hired for six (6) months spanning 1 May 1993 to 30 November 1993. However, on 28 October
1993, Kiamco was placed under preventive suspension from 1 November 1993 to 30 November 1993 in
connection with certain infractions he allegedly committed pending further investigation thereof. On 1
December 1993 Kiamco reported back to work but was prevented by security guards from entering the
company premises. On 27 May 1994 private respondent PNOC-EDC reported to the DOLE that petitioner
Kiamco was terminated on 1 November 1993 due to the expiration of his employment contract and the
abolition of his position. Thus, on 25 April 1994, Kiamco filed before the NLRC Sub-Regional Arbitration
Branch a complaint for illegal suspension and dismissal against the PNOC. On 30 June 1995, the Labor
Arbiter dismissed the complaint for lack of merit since Kiamco could not question his dismissal because
it was in accordance with his employment contract. Kiamco appealed the decision of the Labor Arbiter
to public respondent NLRC which eventually declared that complainant-appellant is a project employee
of the respondent and not a regular employee, ruling out the reinstatement of the complainant with full
back wages. Thus, this petition for certiorari filed by Kiamco before this Court. Issue: Whether an
illegally dismissed project employee may be entitled to reinstatement and payment of back wages.
Ruling: The normal consequences of a finding that an employee has been illegally dismissed are that the
employee becomes entitled to reinstatement to his former position without loss of seniority rights and
the payment of back wages (Santos v. NLRC). Reinstatement restores the employee who was unjustly
dismissed to the position from which he was removed, that is, to his status quo ante dismissal; while the
grant of back wages allows the same employee to recover from the employer that which he had lost by
way of wages as a result of his dismissal. These rights of an employee do not depend on the status of his
employment prior to his dismissal but rather to the legality and validity of his termination. The fact that
an employee is not a regular employee does not mean that he can be dismissed any time, even illegally,
by his employer. In termination cases, the burden of proving just and valid cause for dismissing an
employee from his employment rests upon the employer, and the latter's failure to do so results in
finding that the dismissal is unjustified. Due process in termination cases requires the employer to
furnish the worker or employee sought to be dismissed with two (2) written notices, i.e., a notice which
apprises the employee of the particular acts or omissions for which his dismissal is sought, and a
subsequent notice which informs the employee of the employer's decision to dismiss him (De la Cruz v.
NLRC). The failure of herein private respondents to comply with the due process requirement further
tainted Kiamco's dismissal with irregularity. Additionally, it is established that the complainant's service
is needed until the full completion of the so-called Geothermal Agroindustrial Demonstration Project. It
is unrefuted on record that when complainant's service was terminated, work in the project was still
going on. Assailed Resolution MODIFIED. PNOC and PNOC-EDC are ORDERED to REINSTATE petitioner
Cisell A. Kiamco immediately to his former position without loss of seniority rights and privileges with
full back wages from the date of his dismissal until his actual reinstatement.
ALU-TUCP vs. NLRC and NSC [G.R. No. 109902. August 02, 1994]

15

AUG

Ponente: FELICIANO, J.

FACTS:

[P]etitioners, as employees of private respondent National Steel Corporation (NSC), filed separate
complaints for unfair labor practice, regularization and monetary benefits with the NLRC, Sub-Regional
Arbitration Branch XII, Iligan City. The complaints were consolidated and after hearing, the Labor Arbiter
declared petitioners “regular project employees who shall continue their employment as such for as
long as such [project] activity exists,” but entitled to the salary of a regular employee pursuant to the
provisions in the collective bargaining agreement. It also ordered payment of salary differentials.

The NLRC in its questioned resolutions modified the Labor Arbiter’s decision. It affirmed the Labor
Arbiter’s holding that petitioners were project employees since they were hired to perform work in a
specific undertaking — the Five Years Expansion Program, the completion of which had been
determined at the time of their engagement and which operation was not directly related to the
business of steel manufacturing. The NLRC, however, set aside the award to petitioners of the same
benefits enjoyed by regular employees for lack of legal and factual basis.

The law on the matter is Article 280 of the Labor Code, where the petitioners argue that they are
“regular” employees of NSC because: (i) their jobs are “necessary, desirable and work-related to private
respondent’s main business, steel-making”; and (ii) they have rendered service for six (6) or more years
to private respondent NSC.

ISSUE:

Whether or not petitioners are considered “permanent employees” as opposed to being only “project
employees” of NSC.
HELD:

NO. Petition for Certiorari dismissed for lack of merit. NLRC Resolutions affirmed.

RATIO:

Function of the proviso. Petitioners are not considered “permanent employees”. However, contrary to
petitioners’ apprehensions, the designation of named employees as “project employees” and their
assignment to a specific project are effected and implemented in good faith, and not merely as a means
of evading otherwise applicable requirements of labor laws.

On the claim that petitioners’ service to NSC of more than six (6) years should qualify them as “regular
employees”, the Supreme Court believed this claim is without legal basis. The simple fact that the
employment of petitioners as project employees had gone beyond one (1) year, does not detract from,
or legally dissolve, their status as “project employees”. The second paragraph of Article 280 of the Labor
Code, quoted above, providing that an employee who has served for at least one (1) year, shall be
considered a regular employee, relates to casual employees, not to project employees.
Abc digest

Manila Electric v. Quisumbing

G.R. No. 127598 February 22, 2000

Facts:

Members of the Private respondent union were dissatisfied with the terms of a CBA with petitioner. The
parties in this case were ordered by the Sec. of Labor to execute a collective bargaining agreement (CBA)
wherein.The CBA allowed for the increase in the wages of the employees concerned. The petitioner
argues that if such increase were allowed, it would pass off such to the consumers.

Issue: W/N matters of salary are part of management prerogative

RULING: Yes. There is no need to consult the Secretary of Labor in cases involving contracting out for 6
months or more as it is part of management prerogative. However, a line must be drawn with respect to
management prerogatives on business operations per se and those which affect the rights of the
workers. Employers must see to it that that employees are properly informed of its decisions to attain
harmonious labor relations and enlighten the worker as to their rights.

The contracting out business or services is an exercise of business judgment if it is for the promotion of
efficiency and attainment of economy. Management must be motivated by good faith and contracting
out should not be done to circumvent the law. Provided there was no malice or that it was not done
arbitrarily, the courts will not interfere with the exercise of this judgment.

Manila Electric v. Quisumbing

G.R. No. 127598 February 22, 2000

Facts:

Members of the Private respondent union were dissatisfied with the terms of a CBA with petitioner. The
parties in this case were ordered by the Sec. of Labor to execute a collective bargaining agreement (CBA)
wherein.The CBA allowed for the increase in the wages of the employees concerned. The petitioner
argues that if such increase were allowed, it would pass off such to the consumers.

Issue: W/N matters of salary are part of management prerogative

RULING: Yes. There is no need to consult the Secretary of Labor in cases involving contracting out for 6
months or more as it is part of management prerogative. However, a line must be drawn with respect to
management prerogatives on business operations per se and those which affect the rights of the
workers. Employers must see to it that that employees are properly informed of its decisions to attain
harmonious labor relations and enlighten the worker as to their rights.

The contracting out business or services is an exercise of business judgment if it is for the promotion of
efficiency and attainment of economy. Management must be motivated by good faith and contracting
out should not be done to circumvent the law. Provided there was no malice or that it was not done
arbitrarily, the courts will not interfere with the exercise of this judgment.