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FVR SKILLS v. JOVERT SEVA

FACTS:

This case involves a petition for review on certiorari challenging the decision and resolution of the Court of Appeals (CA) in CA-G.R. SP No. 120991, which affirmed the decision and resolution of the National Labor Relations Commission (NLRC) in NLRC LAC No. 08-001687-10. The respondents in this case were employees of petitioner FVR Skills and Services Exponents, Inc. (petitioner), an independent contractor providing janitorial and other manpower services. Some of the respondents had been employed by the petitioner since 1998.

The petitioner entered into a Contract of Janitorial Service with Robinsons Land Corporation (Robinsons) on April 21, 2008. The respondents were deployed to Robinsons as part of this contract. However, midway through the contract, the petitioner asked the respondents to sign individual contracts stipulating that their employment would end on December 31, 2008, unless earlier terminated. When the service contract with Robinsons expired and was not renewed, the petitioner dismissed the respondents as their employment was dependent on the service contract.

The respondents filed a complaint for illegal dismissal with the NLRC, claiming that they were regular employees who could only be dismissed for just or authorized causes. They also sought payment of their unpaid wage differential, 13th month pay differential, service incentive leave pay, holiday pay, and separation pay. The labor arbiter ruled in favor of the petitioner, but the NLRC reversed the decision and held that the respondents were regular employees. The CA affirmed the NLRC's decision and held the petitioner's officers liable for the monetary awards.

ISSUES:

  1. Whether the respondents were regular employees or project employees.

  2. Whether the respondents were illegally dismissed by the petitioner.

  3. Whether the respondents are entitled to separation pay and other benefits.

  4. Whether the petitioner's president and general manager should be held solidarily liable with the corporation for the respondents' monetary awards.

RULING:

  1. Regular vs. Project Employees

    • The Court ruled that the respondents were regular employees, not project employees. Their work was necessary and desirable to the petitioner's business and they had been continuously employed for years, indicating regular employment.

  2. Illegal Dismissal

    • The respondents were illegally dismissed. The petitioner's failure to comply with substantive and procedural due process in terminating the respondents' employment led the Court to uphold the lower courts' decisions.

  3. Entitlement to Benefits

    • The respondents are entitled to their full backwages, inclusive of allowances and other benefits, from the time of their dismissal up to their actual reinstatement or until the finality of this decision. The Court also affirmed the award of separation pay due to strained relations between the parties.

  4. Solidary Liability

    • The Court held that the petitioner's president and general manager should not be held solidarily liable with the corporation, as the respondents failed to establish their willful participation in any unlawful acts or bad faith.

PRINCIPLES:

  1. Article 280 (now Article 294) of the Labor Code

    • Differentiates regular from project employees, establishing that regular employees perform activities necessary or desirable to the employer’s business and are entitled to security of tenure.

  2. Fixed-Term Contracts

    • Contracts signed under duress or intimidation are voidable. Regular employees cannot be reclassified as project employees through contracts executed after employment commencement.

  3. Doctrine on Corporate Officer Liability

    • Corporate officers are generally not personally liable for corporate obligations unless it is clearly shown that they acted with malice or bad faith.

  4. Guideline for Regular Employment

    • Employment terms and conditions should be clearly communicated at the start of employment to avoid disputes on employee status.

  5. Department Order (DO) 18-02

    • Mandates that contractual employees are treated as regular employees for purposes of labor standards and social legislation.

  6. Substantive and Procedural Due Process in Dismissals

  • Dismissals must be for just or authorized causes and follow due process; otherwise, they are deemed illegal.