FACTS:

Petitioner Omni Hauling Services, Inc. (Omni) was awarded a service contract by the local government of Quezon City to provide garbage hauling services. Omni hired respondents as garbage truck drivers and paleros. When the service contract was renewed for another year, petitioners required respondents to sign employment contracts, but they refused to do so. Omni terminated the employment of respondents, resulting in the filing of cases for illegal dismissal, nonpayment of benefits, and damages. The Labor Arbiter ruled in favor of petitioners, finding that respondents were not illegally dismissed. The National Labor Relations Commission (NLRC) affirmed the LA's ruling, stating that respondents were project employees whose employment was co-terminus with Omni's service contract. Respondents filed a petition for certiorari before the Court of Appeals (CA), which reversed the NLRC's ruling. The CA held that there was no contract of employment to support petitioners' claim that respondents were project employees, and that respondents had already become regular employees by operation of law. It ruled that respondents were illegally dismissed and ordered their reinstatement or payment of separation pay. Petitioners filed a motion for reconsideration, which was denied by the CA, leading to this petition. The core issue is whether the CA erred in setting aside the NLRC's ruling.

ISSUES:

RULING:

PRINCIPLES:

• For an employee to be classified as a project employee, there must be a clear agreement on the completion or termination of the project at the time of engagement.

• The expiration of a fixed-term employment contract does not automatically mean the end of the employment relationship, as the employee may already be deemed a regular employee by operation of law.