ALEJANDRO MARAGUINOT, JR. AND PAUILINO ENERO v.
NLRC, VIC DEL ROSARIO, In the instant case, the petitioners allege that the NLRC acted in total disregard of evidence
VIVA FILMS
FACTS:
Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part of the
filming crew. Sometime in May 1992, sought the assistance of their supervisor to facilitate their
request that their salary be adjusted in accordance with the minimum wage law.
On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would agree to
their request only if they sign a blank employment contract. Petitioners refused to sign such
document. After which, the Mr. Enero was forced to go on leave on the same month and refused
to take him back when he reported for work. Mr. Maraguinot on the other hand was dropped
from the payroll but was returned days after. He was again asked to sign a blank employment
contract but when he refused, he was terminated.
Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The private
respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA
PRODUCTIONS, INC. and that it was primarily engaged in the distribution & exhibition of
movies- but not then making of movies; (b) That they hire contractors called “producers” who act
as independent contractors as that of Vic Del Rosario; and (c) As such, there is no employee-
employer relation between petitioners and private respondents.
The Labor Arbiter held that the complainants are employees of the private respondents. That
the producers are not independent contractor but should be considered as labor-only contractors
and as such act as mere agent of the real employer. Thus, the said employees are illegally
dismissed.
The private respondents appealed to the NLRC which reversed the decision of the Labor Arbiter
declaring that the complainants were project employees due to the ff. reasons: (a) Complainants
were hired for specific movie projects and their employment was co-terminus with each movie
project; (b)The work is dependent on the availability of projects. As a result, the total working
hours logged extremely varied; (c) The extremely irregular working days and hours of
complainants work explains the lump sum payment for their service; and (d) The respondents
alleged that the complainants are not prohibited from working with other movie companies
whenever they are not working for the independent movie producers engaged by the
respondents.
A motion for reconsideration was filed by the complainants but was denied by NLRC. In effect,
they filed an instant petition claiming that NLRC committed a grave abuse of discretion in: (a)
Finding that petitioners were project employees; (b) Ruling that petitioners were not illegally
dismissed; and (c) Reversing the decision of the Labor Arbiter.
material or decisive of the controversy.
ISSUES: W/N there exist an employee- employer relationship between the petitioners and the
private respondents.
HELD: There exist an employee- employer relationship between the petitioners and the private
respondents because of the ff. reasons that nowhere in the appointment slip does it appear that
it was the producer who hired the crew members. Moreover, it was VIVA’s corporate name
appearing on heading of the slip. It can likewise be said that it was VIVA who paid for the
petitioners’ salaries.
Respondents also admit that the petitioners were part of a work pool wherein they attained the
status of regular employees because of the ff. requisites: (a) There is a continuous rehiring of
project employees even after cessation of a project; (b) The tasks performed by the
alleged “project employees” are vital, necessary and indispensable to the usual business
or trade of the employer; and (c) However, the length of time which the employees are
continually re-hired is not controlling but merely serves as a badge of regular
employment.
Since the producer and the crew members are employees of VIVA and that these employees’
works deal with the making of movies. It can be said that VIVA is engaged of making movies
and not on the mere distribution of such.
J&DO AGUILAR CORP V. NLRC
FACTS:
Private respondent Romeo Acedillo began working for petitioner in February 1989 as a helper-
electrician. On January 16, 1992, he received a letter from petitioner informing him of his
severance from the company allegedly due to lack of available projects and excess in the
number of workers needed. He decided to file a case for illegal dismissal before the NLRC after
learning that new workers were being hired by petitioner while his request to return to work was
being ignored. In reply, petitioner maintained that its need for workers varied, depending on
contracts procured in the course of its business of contracting refrigeration and other related
works. It contended that its workers are hired on a contractual or project basis, and their
employment is deemed terminated upon completion of the project for which they were hired.
Finally, petitioner argued that Acedillo was not a regular employee because his employment was
for a definite period and apparently made only to augment the regular work force.
ISSUE: W/N Acedillo was a regular employee. - YES
HELD: 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 services to be performed is seasonal in nature
and the employment is for the duration of the season."2 The records reveal that petitioner did
not specify the duration and scope of the undertaking at the time Acedillo's services were
contracted. Petitioner could have easily presented an employment contract showing that he was
engaged only for a specific project, but it failed to do so. It is not even clear if Acedillo ever signed
an employment contract with petitioner. Neither is there any proof that the duration of his
assignment was made clear to him other than the self-serving assertion of petitioner that the
same can be inferred from the tasks he was made to perform.
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 non-
project employees or employees for an indefinite period. If they are employed in a
particular project, the completion of the project or any phase thereof will not mean
severance of (the) employer-employee relationship
ABESCO V. RAMIREZ
FACTS:
Respondents filed two separate complaints1 for illegal dismissal against the company and its
General Manager, Oscar Banzon, before the Labor Arbiter (LA). Petitioners allegedly dismissed
them without a valid reason and without due process of law. The complaints also included claims
for non-payment of the 13th month pay, five days' service incentive leave pay, premium pay for
holidays and rest days, and moral and exemplary damages. The LA later on ordered the
consolidation of the two complaints.
Petitioners denied liability to respondents and countered that respondents were "project
employees" since their services were necessary only when the company had projects to be
completed. Petitioners argued that, being project employees, respondents' employment was
coterminous with the project to which they were assigned. They were not regular employees
who enjoyed security of tenure and entitlement to separation pay upon termination from work.
ISSUE: W/N Respondents are part of work pool
HELD: The principal test for determining whether employees are "project employees" or "regular
employees" is whether they are assigned to carry out a specific project or undertaking, the
duration and scope of which are specified at the time they are engaged for that project.10 Such
duration, as well as the particular work/service to be performed, is defined in an employment
agreement and is made clear to the employees at the time of hiring.
the LA declared respondents as regular employees because they belonged to a "work
pool" from which the company drew workers for assignment to different projects, at its
discretion. He ruled that respondents were hired and re-hired over a period of 18 years,
hence, they were deemed to be regular employees. He likewise found that their
employment was terminated without just cause. In a decision dated January 7, 1998
employees who are members of a "work pool" from which a company (like petitioner
corporation) draws workers for deployment to its different projects do not become
regular employees by reason of that fact alone. The Court has enunciated in some cases
9 that members of a "work pool" can either be project employees or regular employees.
PALOMAS V. NLRC
FACTS:
Petitioners Ferdinand Palomares and Teodulo Mutia were hired by respondent National Steel
Corporation (NSC) by virtue of contracts of employment for its Five Year Expansion Program or
FYEP
Petitioners, along with other employees, filed a consolidated petition for regularization, wage
differential, CBA coverage and other benefits. Labor Arbiter Nicodemus G. Palangan ordered
the dismissal of the complaint with respect to 26 complainants but ruled in favor of petitioners
NLRC reversed the findings of the Labor Arbiter in a decision dated November 23, 1994.
Respondent Commission held that petitioners were project employees and that their assumption
of regular jobs were mainly due to peakloads or the absence of regular employees during the
latter's temporary leave.
ISSUE: W/N the petitioner would be considered regular employees.
HELD: Article 280 of the Labor Code, the law on the subject of regular employment.
The provisions of the written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for a specific ISSUE: W/N the respondent is regular employee.
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 services to be performed is seasonal
in nature and the employment is for the duration of the season.
RULING:
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
‘The employment contracts signed by private respondent Puente do not have the specified
Provided, That any employee who has rendered at least one year of service, whether such
duration for each project contrary to the provision of Art. 280 of the Labor Code, nor did petitioner
service is continuous or broken shall be considered a regular employee with respect to the
work in the project sites, but had always been assigned at the company plant attending to the
activity in which he is employed and his employment shall continue while such actually exists.
maintenance of all mobile cranes of the company, performing tasks vital and desirable in the
The principal test for determining whether an employee is a project employee and not a company’s usual business for ten (10) continuous years.
regular employee is whether he was assigned to carry out a specific project or
Indicators of project employment. – Either one or more of the following circumstances,
undertaking, the duration and scope of which were specified at the time he was engaged
among other, may be considered as indicators that an employee is a project employee.
for that project.
(a) The duration of the specific/identified undertaking for which the worker is engaged is
Petitioners are project employees. Since its work depends on availability of such
reasonably determinable.
contracts or projects, necessarily the employment of its work force is not permanent but
co-terminous with the projects to which they are assigned and from whose payrolls they (b) Such duration, as well as the specific work/service to be performed, is defined in an
are paid. It would be extremely burdensome for their employer to retain them as employment agreement and is made clear to the employee at the time of hiring.
permanent employees and pay them wages even if there are no projects to work on.
(c) The work/service performed by the employee is in connection with the particular
project/undertaking for which he is engaged.
FILIPINAS V PUENTE (d) The employee, while not employed and awaiting engagement, is free to offer his
services to any other employer.

(e) The termination of his employment in the particular project/undertaking is reported to

FACTS:
the Department of Labor and Employment (DOLE) Regional Office having jurisdiction
Respondent avers that he started working with Petitioner Filsystems, Inc., a corporation engaged over the workplace within 30 days following the date of his separation from work, using
in construction business, on June 12, 1989; that he was initially hired by [petitioner] company as the prescribed form on employees’ terminations/dismissals/suspensions.
an ‘installer’; that he was later promoted to mobile crane operator and was stationed at the
(f) An undertaking in the employment contract by the employer to pay completion bonus
company premises at No. 69 Industrial Road, Bagumbayan, Quezon City; that his work was not to the project employee as practiced by most construction companies.
dependent on the completion or termination of any project; that since his work was not
dependent on any project, his employment with the [petitioner-]company was continuous and
without interruption for the past ten (10) years; that on October 1, 1999, he was dismissed from
his employment allegedly because he was a project employee. He filed a pro forma complaint A.M ORETA V. NLRC
for illegal dismissal against the [petitioner] company on November 18, 1999.
FACTS:
The [petitioner-]company however claims that complainant was hired as a project employee in
Private respondent Grulla was engaged by Engineering Construction and Industrial
the company’s various projects; that his employment contracts showed that he was a project
Development Company (ENDECO) through A.M. Oreta and Co., Inc., as a carpenter in its
worker with specific project assignments; that after completion of each project assignment, his
projects in Jeddah, Saudi Arabia. The contract of employment, which was entered into June 11,
employment was likewise terminated and the same was correspondingly reported to the DOLE.
1980 was for a period of twelve (12) months. Respondent Grulla left the Philippines for Jeddah,
Saudi Arabia on August 5, 1980.
Grulla met an accident which fractured his lumbar vertebra while working at the jobsite. He was
rushed to the New Jeddah Clinic and was confined there for twelve (12) days. On August 27,
1980, Grulla was discharged from the hospital and was told that he could resume his normal
duties after undergoing physical therapy for two weeks.
respondent Grulla reported back to his Project Manager and presented to the latter a medical
certificate declaring the former already fit for work. Since then, he started working again until he
received a notice of termination of his employment on October 9, 1980.
respondent Grulla filed a complaint for illegal dismissal, recovery of medical benefits, unpaid
wages for the unexpired ten (10) months of his contract and the sum of P1,000.00 as
reimbursement of medical expenses against A.M. Oreta and Company, Inc., and Engineering
Construction and Industrial Development Co. (ENDECO) with the Philippine Overseas
Employment Administration (POEA).
ISSUE: w/n respondent Grulla is entitled to salaries corresponding to the unexpired portion of
his employment contract.
HELD: the law is clear to the effect that in all cases involving employees engaged on
probationary period basis, the employer shall make known to the employee at the time he is
hired, the standards by which he will qualify as a regular employee. Nowhere in the employment
contract executed between petitioner company and respondent Grulla is there a stipulation that
the latter shall undergo a probationary period for three months before he can qualify as a regular
employee. There is also no evidence on record showing that the respondent Grulla has been
appraised of his probationary status and the requirements which he should comply in order to
be a regular employee. In the absence of this requisites, there is justification in concluding that
respondent Grulla was a regular employee at the time he was dismissed by petitioner. As such,
he is entitled to security of tenure during his period of employment and his services cannot be
terminated except for just and authorized causes enumerated under the Labor Code and under
the employment contract.
The alleged ground of unsatisfactory performance relied upon by petitioner for
dismissing respondent Grulla is not one of the just causes for dismissal provided in the
Labor Code. Neither is it included among the grounds for termination of employment
under Article VII of the contract of employment executed by petitioner company and
respondent Grulla Moreover, petitioner has failed to show proof of the particular acts or
omissions constituting the unsatisfactory performance of Grulla of his duties, which was
allegedly due to his poor physical state after the accident. Contrary to petitioner's claims,
records show that the medical certificate issued by the hospital where respondent Grulla
was confined as a result of the accident, clearly and positively stated that Grulla was
already physically fit for work after he was released from the hospital
KIMBERLY V. DRILON
FACTS:
Kimberly-Clark Philippines, Inc. (KIMBERLY, for brevity) executed a three-year collective
bargaining agreement (CBA) with United Kimberly-Clark Employees Union-Philippine Transport
and General Workers' Organization (UKCEU-PTGWO) which expired on June 30, 1986.
Within the 60-day freedom period prior to the expiration of and during the negotiations for the
renewal of the aforementioned CBA, some members of the bargaining unit formed another union
called "Kimberly Independent Labor Union for Solidarity, Activism and Nationalism-Organized
Labor Association in Line Industries and Agriculture (KILUSAN-OLALIA)
charging KIMBERLY with unfair labor practices based on the following alleged acts: (1) dismissal
of union members (KILUSAN-OLALIA); (2) non-regularization of casuals/contractuals with over
six months service; (3) non-implementation of appreciation bonus for 1982 and 1983; (4) non-
payment of minimum wages; (5) coercion of employees; and (6) engaging in CBA negotiations
despite the pendency of a petition for certification election.
64 casual workers were challenged by KIMBERLY and (UKCEU-PTGWO) on the ground that
they are not employees, of KIMBERLY but of RANK.
Issue: W/N the workers are employees.
HELD: Art. 280. Regular and Casual Employment. — The provisions of written agreement to
the contrary not withstanding and regardless of the oral agreements of the parties, an
employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or under the completion or
termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to
the activity in which he is employed and his employment shall continue while such
activity exists
The law thus provides for two. kinds of regular employees, namely: (1) those who are
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; and (2) those who have rendered at least one year of
service, whether continuous or broken, with respect to the activity in which they are
employed.
Owing to their length of service with the company, these workers became regular employees,
by operation of law, one year after they were employed by KIMBERLY through RANK. While the
actual regularization of these employees entails the mechanical act of issuing regular
appointment papers and compliance with such other operating procedures as may be adopted
by the employer, it is more in keeping with the intent and spirit of the law to rule that the status
of regular employment attaches to the casual worker on the day immediately after the end of his
first year of service. To rule otherwise, and to instead make their regularization dependent on
the happening of some contingency or the fulfillment of certain requirements, is to impose a
burden on the employee which is not sanctioned by law.
SAN MIGUEL V. ABALLA
FACTS:
The language of a contract disavowing the existence of an employer-employee relationship is
not determinative of the parties’ relationship. It is the totality of the facts and surrounding
circumstances of the case.
Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose Cooperative (Sunflower)
entered into a one-year Contract of Service and such contract is renewed on a monthly basis
until terminated. Pursuant to this, respondent Prospero Aballa et al. rendered services to SMC.
After one year of rendering service, Aballa et al., filed a complaint before National Labor
Relations Commission (NLRC) praying that they be declared as regular employees of SMC. On
the other hand, SMC filed before the Department of Labor and Employment (DOLE) a Notice of
Closure due to serious business losses. Hence, the labor arbiter dismissed the complaint and
ruled in favor of SMC. Aballa et al. then appealed before the NLRC. The NLRC dismissed the
appeal finding that Sunflower is an independent contractor.
On appeal, the Court of Appeals reversed NLRC’s decision on the ground that the agreement
between SMC and Sunflower showed a clear intent to abstain from establishing an employer-
employee relationship.
ISSUE:Whether or not Aballa et al. are employees of SMC
HELD:
The test to determine the existence of independent contractorship is whether one
claiming to be an independent contractor has contracted to do the work according to his
own methods and without being subject to the control of the employer, except only as to
the results of the work
In legitimate labor contracting, the law creates an employer-employee relationship for a limited
purpose, i.e., to ensure that the employees are paid their wages. The principal employer
becomes jointly and severally liable with the job contractor, only for the payment of the
employees’ wages whenever the contractor fails to pay the same. Other than that, the principal
employer is not responsible for any claim made by the employees.
In labor-only contracting, the statute creates an employer-employee relationship for a
comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered
merely an agent of the principal employer and the latter is responsible to the employees of the
labor-only contractor as if such employees had been directly employed by the principal
employer.
The Contract of Services between SMC and Sunflower shows that the parties clearly disavowed
the existence of an employer-employee relationship between SMC and private respondents. The
language of a contract is not, however, determinative of the parties’ relationship; rather it is the
totality of the facts and surrounding circumstances of the case. A party cannot dictate, by the
mere expedient of a unilateral declaration in a contract, the character of its business, i.e.,
whether as labor-only contractor or job contractor, it being crucial that its character be measured
in terms of and determined by the criteria set by statute.
And from the job description provided by SMC itself, the work assigned to Aballa et al. was
directly related to the aquaculture operations of SMC. As for janitorial and messengerial
services, that they are considered directly related to the principal business of the employer has
been jurisprudentially recognized.
The law of course provides for two kinds of regular employees, namely: (1) those who are
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer; and (2) those who have rendered at least one year of
service, whether continuous or broken, with respect to the activity in which they are
employed.[69]
As for those of private respondents who were engaged in janitorial and messengerial
tasks, they fall under the second category and are thus entitled to differential pay and
benefits extended to other SMC regular employees from the day immediately following
their first year of service
INTEGRATED CONTRACTOR V CA
FACTS:
Petitioner is a plumbing contractor. Its business depends on the number and frequency of the
projects it is able to contract with its clients. Private respondent Solon worked for petitioner. And
his employment record shows that he has by petitioner from December 1994 to January 1998 in
10 projects. On February 23, 1998, while private respondent was about to log out from work, he
was informed by the warehouseman that the main office had instructed them to tell him it was
his last day of work as he had been terminated. When private respondent went to the petitioner’s
office on February 24, 1998 to verify his status, he found out that indeed, he had been
terminated. He went back to petitioner’s office on February 27, 1998 to sign a clearance so he
could claim his 13th month pay and tax refunds. However, he had second thoughts and refused
to sign the clearance when he read the clearance indicating he had resigned. On March 6, 1998,
he filed a complaint alleging that he was illegally dismissed without just cause and without due
process.
yearly service incentive leave of five days with pay, and Section 3, Rule V, Book III of the
Implementing Rules and Regulations, defines the term at least one year of service to
mean service within 12 months, whether continuous or broken reckoned from the date
the employee started working, including authorized absences and paid regular holidays,
unless the working days in the establishment as a matter of practice or policy, or that
provided in the employment contract is less than 12 months, in which case said period
shall be considered as one year. Accordingly, private respondents service incentive leave
credits of five days for every year of service, based on the actual service rendered to the
petitioner, in accordance with each contract of employment should be computed up to
the date of reinstatement pursuant to Article 279 of the Labor Code
The test to determine whether employment is regular or not is the reasonable connection
between the particular activity performed by the employee in relation to the usual
business or trade of the employer. Also, if the employee has been performing the job for
at least one year, even if the performance is not continuous or merely intermittent, the
law deems the repeated and continuing need for its performance as sufficient evidence
of the necessity, if not indispensability of that activity to the business.[18] Thus, we held
that where the employment of project employees is extended long after the supposed
project has been finished, the employees are removed from the scope of project
employees and are considered regular employees.

The petitioner asserts that the private respondent was a project employee. Thus, when the
project was completed and private respondent was not re-assigned to another project, petitioner
did not violate any law since it was petitioner’s discretion to re-assign the private respondent to
other projects.

ISSUE: Whether the respondent is a project employee of the petitioner or a regular employee.

HELD: The SC held that the principal test in determining whether an employee is a
“project employee” or “regular employee,” is, whether he is assigned to carry out a
“specific project or undertaking,” the duration (and scope) of which are specified at the
time the employee is engaged in the project. “Project” refers to a particular job or
undertaking that is within the regular or usual business of the employer, but which is
distinct and separate and identifiable from the undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times.

The SC was convinced he was initially a project employee. The services he rendered, the
duration and scope of each project are clear indications that he was hired as a project employee.

Article 95(a) of the Labor Code governs the award of service incentive leave. It provides
that every employee who has rendered at least one year of service shall be entitled to a