G.R. No.

81077 June 6, 1990

LUIS DE OCAMPO, JR., JOSE RODRIGO, EUGENIO ESQUEJO, VICTORINO TABERNERO, RIZALO DALIVA,
FRANCISCO ACOSTA and 87 others listed in Annex 'A' hereof, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MAKATI DEVELOPMENT
CORPORATION, respondents.

Alfra Beta A. Serquina for petitioners.

Maximo P. Amurao, Jr. for private respondent.

CRUZ, J.:

The petition seeks a reversal of the decision of the respondent NLRC dated June 8, 1984, the dispositive
portion of which reads as follows:

WHEREFORE, the Decision appealed from is hereby MODIFIED as hereinabove indicated. Consequently,
the application for clearance to dismiss the union officers is granted; the employment status of the
individual complainants who were project employees is also considered severed, not on account of
illegality of the strike but due to the expiration of their employment contracts; and the respondent is
ordered to reinstate, without back wages, the individual complainants who were regular employees
except those who were officers of the union among them or paid separation pay at their option,
equivalent to one month's pay or one-half month's pay for every year of service, whichever is greater.

It appears that on September 30, 1980, the services of 65 employees of private respondent Makati
Development Corporation were terminated on the ground of the expiration of their contracts; that the
said employees filed a complaint for illegal dismissal against the MDC on October 1, 1980; * that on
October 8, 1980, as a result of the aforementioned termination, the Philippine Transport and General
Workers Association, of which the complainants were members, filed a notice of strike on the grounds
of union-busting, subcontracting of projects which could have been assigned to the dismissed
employees, and unfair labor practice; that on October 14, 1980, the PTGWA declared a strike and
established picket lines in the perimeter of the MDC premises; that on November 4, 1980, the MDC filed
with the Bureau of Labor Relations a motion to declare the strike illegal and restrain the workers from
continuing the strike; that on that same day and several days thereafter the MDC filed applications for
clearance to terminate the employment of 90 of the striking workers, whom it had meanwhile
preventively suspended; that of the said workers, 74 were project employees under contract with the
MDC with fixed terms of employment; and that on August 31, 1982, Labor Arbiter Apolinar L. Sevilla
rendered a decision 1denying the applications for clearance filed by the MDC and directing it to reinstate
the individual complainants with two months back wages each.

This is the decision modified by the NLRC 2 which is now faulted by the petitioners for grave abuse of
discretion. The contention is that the public respondent acted arbitrarily and erroneously in ruling that:
a) the motion for reconsideration was filed out of time; b) the strike was illegal; and c) the separation of
the project employees was justified.

Having considered the issues and the arguments of the parties in their respective pleadings, including
the petitioners' ex parte motion for early resolution of this case, the Court makes the findings that
follow.

On the first issue, we note that the rule on motions for reconsideration of the decision of the NLRC is
now found in Rule X of the Revised Rules of the NLRC, providing thus:

Section 9. Motions for reconsideration — Motions for reconsideration of any order, resolution or
decision of the Commission shall not be entertained except when based on palpable or patent errors,
provided that the motion is under oath and filed within ten (I 0) calendar days from receipt of the order,
resolution or decision, with proof of service that a copy of the same has been furnished, within the
aforesaid reglementary period, the adverse party and provided further, that only one such motion shall
be entertained.

Subject to the provisions of Section 3, Rule IX of these Rules, motions for reconsideration of an order,
resolution or decision of a Division shall be resolved by the Division of origin.

However, this section was promulgated only on November 5, 1986, and became effective only on
November 29, 1986, after the required publication. 3 It was therefore not yet in force when the required
resolution in the present case was rendered in 1984.

Apparently agreeing that the reglementary period then was fifteen days, the Solicitor General argues
that the petitioner's motion for reconsideration was nevertheless filed late on June 26, 1984, the
decision of the NLRC having been rendered on June 7, 1984, or 19 days earlier. 4 This is not exactly
accurate. The fact is Annex "C" of the petition shows that a copy of the decision was received by the
petitioner only on June 13, 1984, and it was from that date that the reglementary period commenced to
run. This means that the motion for reconsideration was filed on time, only 13 days having elapsed
before the deadline.

But this notwithstanding, we must hold that under the law then in force, to wit, PD No. 823 as amended
by PD No. 849, the strike was indeed illegal. In the first place, it was based not on the ground of
unresolved economic issues, which was the only ground allowed at that time, when the policy was
indeed to limit and discourage strikes. Secondly, the strike was declared only after 6 days from the
notice of strike and before the lapse of the 30-day period prescribed in the said law for a cooling-off of
the differences between the workers and management and a possible avoidance of the intended strike.
That law clearly provided:

Sec. 1. It is the policy of the state to encourage free trade unionism and free collective bargaining within
the framework of compulsory and voluntary arbitration. Therefore all forms of strikes, picketing and
lockout are hereby strictly prohibited in vital industries such as in public utilities, including
transportation and communication, companies engaged in the manufacturer processing as well as in the
distribution of fuel gas, gasoline and fuel or lubricating oil, in companies engaged in the production or
processing of essential commodities or products for export, and in companies engaged in banking of any
kind, as well as in hospitals and in schools and colleges.

However, any legitimate labor union may strike and any employer may lockout in establishments not
covered by General Order No. 5 only on grounds of unresolved economic issues in collective bargaining,
in which case the union or the employer shall file a notice with the Bureau of Labor Relations at least 30
days before the intended strike or lockout. (Emphasis supplied)

It is our ruling that the leaders of the illegal strike were correctly punished with dismissal, but their
followers (other than the contract workers) were properly ordered reinstated, considering their lesser
degree of responsibility. The penalty imposed upon the leaders was only proper because it was they
who instigated the strike even if they knew, or should have known, that it was illegal. It was also fair to
rule that the reinstated strikers were not entitled to backpay as they certainly should not be
compensated for services not rendered during the illegal strike. In our view, this is a reasonable
compromise between the demands of the workers and the rights of the employer.

Coming now to the last question, we stress the rule in Cartagenas v. Romago Electric Co., 5 that contract
workers are not considered regular employees, their services being needed only when there are projects
to be undertaken. 'The rationale of this rule is that if a project has already been completed, it would be
unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing
except waiting until another project is begun, if at all. In effect, these stand-by workers would be
enjoying the status of privileged retainers, collecting payment for work not done, to be disbursed by the
employer from profits not earned. This is not fair by any standard and can only lead to a coddling of
labor at the expense of management.

We believe, however, that this rule is not applicable in the case at bar, and for - good reason. The record
shows that although the contracts of the project workers had indeed expired, the project itself was still
on-going and so continued to require the workers' services for its completion. 6 There is no showing that
such services were unsatisfactory to justify their termination. This is not even alleged by the private
respondent. One can therefore only wonder why, in view of these circumstances, the contract workers
were not retained to finish the project they had begun and were still working on. This had been done in
past projects. This arrangement had consistently been followed before, which accounts for the long
years of service many of the workers had with the MDC.

It is obvious that the real reason for the termination of their services-which, to repeat, were still
needed-was the complaint the project workers had filed and their participation in the strike against the
private respondent. These were the acts that rendered them persona non grata to the management.
Their services were discontinued by the MDC not because of the expiration of their contracts, which had
not prevented their retention or rehiring before as long as the project they were working on had not yet
been completed. The real purpose of the MDC was to retaliate against the workers, to punish them for
their defiance by replacing them with more tractable employees.
Also noteworthy in this connection is Policy Instruction No. 20 of the Department of Labor, providing
that "project employees are not entitled to separation 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 projects in
which they had been employed by a particular construction company." 7 Affirmatively put, and
interpreting it in the most liberal way to favor the working class, the rule would entitle project
employees to separation pay if the projects they are working on have not yet been completed when
their services are terminated. And this should be true even if their contracts have expired, on the theory
that such contracts would have been renewed anyway because their services were still needed.

Applying this rule, we hold that the project workers in the case at bar, who were separated even before
the completion of the project at the New Alabang Village and not really for the reason that their
contracts had expired, are entitled to separation pay. We make this disposition instead of ordering their
reinstatement as it may be assumed that the said project has been completed by this time. Considering
the workers to have been separated without valid cause, we shall compute their separation pay at the
rate of one month for every year of service of each dismissed employee, up to the time of the
completion of the project. 8 We feel this is the most equitable way to treat their claim in light of their
cavalier dismissal by the private respondent despite their long period of satisfactory service with it.

It is the policy of the Constitution to afford protection to labor in recognition of its role in the
improvement of our welfare and the strengthening of our democracy. An exploited working class is a
discontented working class. It is a treadmill to progress and a threat to freedom. Knowing this, we must
exert all effort to dignify the lot of the employee, elevating him to the same plane as his employer, that
they may better work together as equal partners in the quest for a better life. This is a symbiotic
relationship we must maintain if such a quest is to succeed.

WHEREFORE, the appealed decision of the NLRC is AFFIRMED but with the modification that the
contract workers are hereby declared to have been illegally separated before the expiration of the
project they were working on and so are entitled to separation pay equivalent to one month salary for
every year of service. No costs.

SO ORDERED.
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.