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E. GANZON v. FORTUNATO B. ANDO

FACTS:

Respondent Fortunato B. Ando, Jr. filed a complaint against petitioner E. Ganzon, Inc. (EGI) and its President, Eulalio Ganzon, for illegal dismissal and money claims. Ando claimed that he was a regular employee working as a finishing carpenter for EGI and was repeatedly hired from January 21, 2010 until April 30, 2011 when he was terminated without prior notice and hearing. He also claimed underpayment of salary, overtime pay, 13th-month pay, non-payment of holiday pay and service incentive leave, illegal deduction, and attorney's fees. EGI, on the other hand, argued that Ando was engaged as a project worker based on three project employment contracts, and he was paid the correct salary based on the applicable wage order. The Labor Arbiter declared Ando as a project employee of EGI but granted some of his money claims. The NLRC affirmed the Labor Arbiter's decision, but the CA annulled the said resolutions and declared Ando to be illegally dismissed. EGI filed a petition for review on certiorari with the Supreme Court.

ISSUES:

  1. Whether the employment contracts of the petitioner fall under the category of project employment.

  2. Whether the extensions of the petitioner's contracts mean that he is no longer considered a project employee.

  3. Whether the employment of the petitioner as a project employee was valid

  4. Whether the petitioner's termination was valid

  5. The case did not provide any information about the specific issues raised by the parties.

RULING:

  1. Yes. The Court held that the petitioner's employment contracts are valid project employment contracts. The contracts explicitly stated that he was engaged as a project worker, with a specific period of engagement. The fact that the contracts mentioned the possibility of extension or shortening of the period depending on the work phasing does not negate the essence of project employment. The completion or termination of the projects is still certain.

  2. No. The extensions of the petitioner's contracts do not remove him from the scope of project employment. The extensions were properly made within the scope of the projects for which he was hired. As a project employee, he cannot expect continuous employment beyond the completion of the project.

  3. The employment of the petitioner as a project employee was valid. The duration of the specific undertaking for which the petitioner was engaged was reasonably determinable. The employment contract specified the termination of the employment relationship upon completion of the phase of work for which the petitioner was hired for. The completion of the project or phase thereof was determined on the date originally agreed upon or indicated in the contract. The petitioner's tenure as a project employee remained definite because there was certainty of completion or termination of the projects. Therefore, the petitioner's status as a project employee was not converted to that of a regular employee.

  4. The petitioner's termination was valid. Prior notice of termination is not required if the termination is brought about by the completion of the contract or phase thereof for which the project employee was engaged. In this case, the employer complied with the requirement by submitting the required establishment employment reports to the Department of Labor and Employment regarding the petitioner's termination.

  5. The Decision of the Labor Arbiter is reinstated.

PRINCIPLES:

  • Project employment contracts are valid, and an employee who enters into such a contract is deemed to understand that his employment is coterminous with the project.

  • Project employment contracts must be knowingly and voluntarily agreed upon by the parties, without any force, duress, or improper pressure being brought to bear upon the employee.

  • The interest of the worker is paramount, and project employment contracts that prejudice the employee or are contrary to public policy, morals, good custom, or public order should be struck down.

  • The nature of the employer's business may require the use of project employees, and it is not necessary to provide permanent employment to employees in such cases.

  • Project employment and fixed-term employment are different. The decisive determinant in project employment is the activity that the employee is called upon to perform, while in fixed-term employment, the decisive determinant is the day certain agreed upon by the parties for the commencement and termination of the employment relationship.

  • The length of service through repeated and successive rehiring does not convert a project employee into a regular employee. The rehiring of construction workers on a project-to-project basis is dictated by the practical consideration that experienced construction workers are more preferred.

  • The completion of a project or phase thereof automatically terminates the employment of a project employee, and prior notice of termination is not required. The employer only needs to submit a report to the Department of Labor and Employment regarding the termination.

There are no specific legal principles or doctrines mentioned in this case.