Herma Shipyard, Inc. vs. Oliveros, et al., G.R. No.

208936, 17 April 2017, First Division, Del Castillo

Parties:
Petitioner- Herma Shipyard, Inc. and Mr. Herminio Esguerra
Respondent- Danilo Oliveros, Jojit Basa, Arnel Sabal, Camilo Oliveros, Robert Nario, Frederjck Catig, Ricardo Ontalan,
Ruben Delgado, Segundo Labosta, Exequiel Ollveria, Oscar Tirol, and Romeo Trinidad

Neither the performance by project-based employees of task necessary and desirable to the usual
business operation of the employer, nor their repeated rehiring to different projects will automatically
result to their regularization

Respondents were employees of Herma Shipyard occupying various positions who were dismissed from
employment on various dates. They filed a case against petitioner with the contention that they are regular employees
who have been continuously performing tasks usually necessary and desirable in its business. For their defense,
petitioners argued that respondents were its project-based employees in its shipbuilding projects, and that their
dismissal is proper since the specific project for which the respondents were hired had already been completed. Were
respondents project-based employees?

Yes. Under Article 294 of the Labor Code, 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. It is crucial that the employees were informed of their status as project employees at
the time of hiring and that the period of their employment must be knowingly and voluntarily agreed upon by the
parties. Here, respondents were fully apprised of the nature and scope of their work, and were adequately informed
of their employment status as project-based employees.

Moreover, the fact that the respondents were performing task necessary and desirable to the business of
petitioners will not make them regular employees. It is settled that the performance by project-based employees of
task necessary and desirable to the usual business or trade of the employer will not automatically result to
regularization. Neither the repeated rehiring of project-based employees to different projects will make them regular
employees. Length of service through rehiring is not the controlling determinant of the employment tenure of project-
based employees. Respondents remained project employees regardless of the number of projects in which they have
worked.