RECRUITMENT
recruitment, while Section 7 enumerates the penalties
PEOPLE OF THE PHILIPPINES, Appellee, vs.
ALELIE TOLENTINO a.k.a. "Alelie Tolentino y
Hernandez," Appellant.
Illegal Recruitment in Large Scale
Article 13(b) of the Labor Code defines recruitment and
placement as "any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for
profit or not."
Illegal recruitment, on the other hand is defined under
Article 38 of the Labor Code as follows: ART. 38. Illegal
Recruitment
(a) Any recruitment activities, including the prohibited
practices enumerated under Article 34of this Code, to be
undertaken by non-licensees or non-holders of authority
shall be deemed illegal and punishable under Article 39 of
this Code. The Department of Labor and Employment or
any law enforcement officer may initiate complaints under
this Article.
(b) Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving
economic sabotage and shall be penalized in accordance
with Article 39 hereof. Illegal recruitment is deemed
committed by a syndicate if carried out by a group of three
(3) or more persons conspiring and/or confederating with
one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first
paragraph hereof. Illegal recruitment is deemed committed
in large scale if committed against three (3) or more
persons individually or as a group.
Illegal recruitment, as defined under Article 38 of the Labor
Code, encompasses recruitment activities for both local and
overseas employment. However, illegal recruitment under
this article is limited to recruitment activities undertaken by
non-licensees or non-holders of authority.10 Thus, under the
Labor Code, to constitute illegal recruitment in large scale,
three elements must concur:
1. The accused undertook any recruitment activity defined
under Art. 13 (b) or any prohibited practice enumerated
under Art. 34 of the Labor Code.
2. He did not have the license or the authority to lawfully
engage in the recruitment and placement of workers.
3. He committed the same against three or more persons,
individually or as a group.11
RA 8042,12 otherwise known as the "Migrant Workers and
Overseas Filipinos Act of 1995," established a higher
standard of protection and promotion of the welfare of the
migrant workers, their families and overseas Filipinos in
distress. RA 8042 also broadened the concept of illegal
recruitment for overseas employment and increased the
penalties, especially for Illegal Recruitment in Large Scale
and Illegal Recruitment Committed by a Syndicate, which
are considered offenses involving economic
sabotage.13 Part II of RA 8042 defines and penalizes illegal
recruitment for employment abroad, whether undertaken by
a non-licensee or non-holder of authority or by a licensee or
holder of authority.
1
Section 6 of RA 8042 provides for the definition of illegal
therefor, thus:
SEC. 6. Definition. – For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring
workers and includes referring, contract services, promising
or advertising for employment abroad, whether for profit or
not, when undertaken by a non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential
Decree No. 442, as amended, otherwise known as the
Labor Code of the Philippines: Provided, That any such
non-licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad for two or more
persons shall be deemed so engaged. It shall likewise
include the following acts, whether committed by any
person, whether a non-licensee, non-holder, licensee or
holder of authority:
(a) To charge or accept directly or indirectly any amount
greater than that specified in the schedule of allowable fees
prescribed by the Secretary of Labor and Employment, or to
make a worker pay any amount greater than that actually
received by him as a loan or advance;
(b) To furnish or publish any false notice or information or
document in relation to recruitment or employment;
(c) To give any false notice, testimony, information or
document or commit any act of misrepresentation for the
purpose of securing a license or authority under the Labor
Code;
(d) To induce or attempt to induce a worker already
employed to quit his employment in order to offer him
another unless the transfer is designed to liberate a worker
from oppressive terms and conditions of employment;
(e) To influence or attempt to influence any person or entity
not to employ any worker who has not applied for
employment through his agency;
(f) To engage in the recruitment or placement of workers in
jobs harmful to public health or morality or to the dignity of
the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the
Secretary of Labor and Employment or by his duly
authorized representative;
(h) To fail to submit reports on the status of employment,
placement vacancies, remittance of foreign exchange
earnings, separation from jobs, departures and such other
matters or information as may be required by the Secretary
of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker,
employment contracts approved and verified by the
Department of Labor and Employment from the time of
actual signing thereof by the parties up to and including the
period of the expiration of the same without the approval of
the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement
agency to become an officer or member of the Board of any
corporation engaged in travel agency or to be engaged
directly or indirectly in the management of a travel agency;
(k) To withhold or deny travel documents from applicant
workers before departure for monetary or financial
considerations other than those authorized under the Labor
Code and its implementing rules and regulations;
(l) Failure to actually deploy without valid reason as
determined by the Department of Labor and Employment;
and
(m) Failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for
purposes of deployment, in cases where the deployment
does not actually take place without the worker’s fault.
Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving
economic sabotage.
Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or
more persons individually or as a group.
EMPLOYMENT OF NRA
GENERAL MILLING CORPORATION and EARL
TIMOTHY CONE, petitioners, vs.
HON. RUBEN D. TORRES, in his capacity as Secretary
of Labor and Employment, HON. BIENVENIDO E.
LAGUESMA, in his capacity as Acting Secretary of
Labor and Employment, and BASKETBALL COACHES
ASSOCIATION OF THE PHILIPPINES, respondents.
Petitioners apparently also question the validity of the
Implementing Rules and Regulations, specifically Section 6
(c), Rule XIV, Book I of the Implementing Rules, as
imposing a condition not found in the Labor Code itself.
Section 6 (c), Rule XIV, Book I of the Implementing Rules,
provides as follows:
Section 6. Issuance of Employment Permit –– the Secretary
of Labor may issue an employment permit to the applicant
based on:
a) Compliance by the applicant and his employer with the
requirements of Section 2 hereof;
b) Report of the Bureau Director as to the availability or
non-availability of any person in the Philippines who is
competent and willing to do the job for which the services of
the applicant are desired.
(c) His assessment as to whether or not the employment of
the applicant will redound to the national interest;
(d) Admissibility of the alien as certified by the Commission
on Immigration and Deportation;
(e) The recommendation of the Board of Investments or
other appropriate government agencies if the applicant will
be employed in preferred areas of investments or in
accordance with the imperative of economic development;
xxx xxx xxx
(Emphasis supplied)
Article 40 of the Labor Code reads as follows:
Art. 40. Employment per unit of non-resident aliens. –– Any
alien seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who
desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the
Department of Labor.
The employment permit may be issued to a non-resident
alien or to the applicant employer after a determination of
the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to
perform the services for which the alien is desired.
2
For an enterprise registered in preferred areas of
investments, said employment permit may be issued upon
recommendation of the government agency charged with
the supervision of said registered enterprise. (Emphasis
supplied)
Petitioners apparently suggest that the Secretary of Labor
is not authorized to take into account the question of
whether or not employment of an alien applicant would
"redound to the national interest" because Article 40 does
not explicitly refer to such assessment. This argument
(which seems impliedly to concede that the relationship of
basketball coaching and the national interest is tenuous and
unreal) is not persuasive. In the first place, the second
paragraph of Article 40 says: "[t]he employment
permit may be issued to a non-resident alien or to the
applicant employer after a determination of the non-
availability of a person in the Philippines who is competent,
able and willing at the time of application to perform the
services for which the alien is desired." The permissive
language employed in the Labor Code indicates that the
authority granted involves the exercise of discretion on the
part of the issuing authority. In the second place, Article 12
of the Labor Code sets forth a statement of objectives that
the Secretary of Labor should, and indeed must, take into
account in exercising his authority and jurisdiction granted
by the Labor Code,
Art. 12. Statement of Objectives. –– It is the policy of the
State:
a) To promote and maintain a state of full employment
through improved manpower training, allocation and
utilization;
xxx xxx xxx
c) To facilitate a free choice of available employment by
persons seeking work in conformity with the national
interest;
d) To facilitate and regulate the movement of workers in
conformity with the national interest;
e) To regulate the employment of aliens, including the
establishment of a registration and/or work permit system;
xxx xxx xxx
Thus, we find petitioners' arguments on the above points of
constitutional law too insubstantial to require further
consideration.1av
ALIEN PERMIT/ JURISDICTION OF LABOR ARBITER
Jurisdiction of Labor Arbiters and the Commission. — (a)
Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear
and decide x x x the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strikes
and lockouts;
6. Except claims for Employees Compensation, Social
Security, Medicare and other maternity benefits, all other
claims, arising from employer-employee relations, including
those of persons in domestic or household service,
involving an amount exceeding five thousand pesos
(₱5,000.00) regardless of whether accompanied with a
claim for reinstatement.
(b) The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation of collective
bargaining agreements and those arising from the
interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by
referring the same to the grievance machinery and
voluntary arbitration as may be provided in said
agreements.
Corporate officers are given such character either by the
Corporation Code or by the corporation’s by-laws. Under
Section 25 of the Corporation Code, the corporate officers
are the president, secretary, treasurer and such other
officers as may be provided in the by-laws.19 Other officers
are sometimes created by the charter or by-laws of a
corporation, or the board of directors may be empowered
under the by-laws of a corporation to create additional
offices as may be necessary.
The law and the rules are consistent in stating that the
employment permit must be acquired prior to employment.
The Labor Code states: "Any alien seeking admission to the
Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment
permit from the Department of Labor." Section 4, Rule XIV,
Book I of the Implementing Rules and Regulations
provides:
"Employment permit required for entry. – No alien seeking
employment, whether as a resident or non-resident, may
enter the Philippines without first securing an employment
permit from the Ministry. If an alien enters the country under
a non-working visa and wishes to be employed thereafter,
he may be allowed to be employed upon presentation of a
duly approved employment permit."
EMPLOYMENT OF SPECIAL WORKERS
1. LEARNERS
2. HANDICAPPED WORKER
Art. 80. Employment agreement. — Any employer who
employs handicapped workers shall enter into an
employment agreement with them, which agreement shall
include:
(a) The names and addresses of the handicapped workers
to be employed;
(b) The rate to be paid the handicapped workers which shall
be not less than seventy five (75%) per cent of the
applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped workers.
In this light, the Magna Carta for Disabled Persons
mandates that a qualified disabled employee should be
given the same terms and conditions of employment as a
qualified able-bodied person. Section 5 of the Magna Carta
provides:
3
Sec. 5. Equal Opportunity for Employment. — No
disabled person shall be denied access to
opportunities for suitable employment. A qualified
disabled employee shall be subject to the same
terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied
person.
The fact that the employees were qualified disabled
persons necessarily removes the employment contracts
from the ambit of Article 80. Since the Magna Carta accords
them the rights of qualified able-bodied persons, they are
thus covered by Article 280 of the Labor Code, which
provides:
Art. 280. Regular and Casual Employment. — The
provisions of 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
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.
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 as
regular employee with respect to the activity in
which he is employed and his employment shall
continue while such activity exists.
The test of whether an employee is regular was laid down
in De Leon v. NLRC, 14 in which this Court held:
The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the
usual business or trade of the employer.
3. APPRENTICESHIP
Registration and Approval by the TESDA of
Apprenticeship Program Required Before Hiring of
Apprentices
The Labor Code defines an apprentice as a worker who is
covered by a written apprenticeship agreement with an
employer.11 One of the objectives of Title II (Training and
Employment of Special Workers) of the Labor Code is to
establish apprenticeship standards for the protection of
apprentices.12 In line with this objective, Articles 60 and 61
of the Labor Code provide:
ART. 60. Employment of apprentices. — Only employers
in the highly technical industries may employ
apprentices and only in apprenticeable occupations
approved by the Minister of Labor and Employment.
(Emphasis supplied)
ART. 61. Contents of apprenticeship agreements. —
Apprenticeship agreements, including the wage rates of
apprentices, shall conform to the rules issued by the
Minister of Labor and Employment. The period of
apprenticeship shall not exceed six
months. Apprenticeship agreements providing for wage
rates below the legal minimum wage, which in no case
shall start below 75 percent of the applicable minimum
wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Minister
of Labor and Employment. The Ministry shall develop
standard model programs of apprenticeship.
. It is mandated that apprenticeship agreements
entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship
program duly approved by the Minister of Labor and
Employment.
Prior approval by the Department of Labor and
Employment of the proposed apprenticeship program
is, therefore, a condition sine qua non before an
apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with
the Department of Labor and Employment is a preliminary
step towards its final approval and does not instantaneously
give rise to an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to
"establish a national apprenticeship program through the
participation of employers, workers and government and
non-government agencies" and "to establish apprenticeship
standards for the protection of apprentices." To translate
such objectives into existence, prior approval of the DOLE
to any apprenticeship program has to be secured as a
condition sine qua non before any such apprenticeship
agreement can be fully enforced. The role of the DOLE in
apprenticeship programs and agreements cannot be
debased.
Republic Act No. 779615 (RA 7796), which created the
TESDA, has transferred the authority over apprenticeship
programs from the Bureau of Local Employment of the
DOLE to the TESDA.16 RA 7796 emphasizes TESDA’s
approval of the apprenticeship program as a pre-requisite
for the hiring of apprentices. Such intent is clear under
Section 4 of RA 7796:
SEC. 4. Definition of Terms. — As used in this Act:
xxx
j) "Apprenticeship" training within employment with
compulsory related theoretical instructions involving
a contract between an apprentice and an employer on
an approved apprenticeable occupation;
k) "Apprentice" is a person undergoing training for an
approved apprenticeable occupation during an
established period assured by an apprenticeship
agreement;
l) "Apprentice Agreement" is a contract wherein a
prospective employer binds himself to train the apprentice
who in turn accepts the terms of training for a recognized
apprenticeable occupation emphasizing the rights,
duties and responsibilities of each party;
m) "Apprenticeable Occupation" is an occupation
officially endorsed by a tripartite body and approved for
4
apprenticeship by the Authority [TESDA]; (Emphasis
supplied)
The requisite TESDA approval of the apprenticeship
program prior to the hiring of apprentices was further
emphasized by the DOLE with the issuance of Department
Order No. 68-04 on 18 August 2004. Department Order No.
68-04, which provides the guidelines in the implementation
of the Apprenticeship and Employment Program of the
government, specifically states that no enterprise shall be
allowed to hire apprentices unless its apprenticeship
program is registered and approved by TESDA.
Illegal Termination
Under Article 27922 of the Labor Code, an employer may
terminate the services of an employee for just causes23 or
for authorized causes.24 Furthermore, under Article
277(b)25 of the Labor Code, the employer must send the
employee who is about to be terminated, a written notice
stating the causes for termination and must give the
employee the opportunity to be heard and to defend
himself. Thus, to constitute valid dismissal from
employment, two requisites must concur: (1) the dismissal
must be for a just or authorized cause; and (2) the
employee must be afforded an opportunity to be heard and
to defend himself.26
EMPLOYMENT CONDITIONS NOT INCLUDED
1. MANAGERIAL
In cases of unlawful dismissal, the employer bears the
burden of proving that the termination was for a valid or
authorized cause, but before the employer is expected to
discharge its burden of proving that the dismissal was legal,
the employee must first establish by substantial evidence
the fact of her dismissal from employment.
.As a rule, the employer who interposes the resignation of
the employee as a defense should prove that the employee
voluntarily resigned.40 A valid resignation is the voluntary
act of an employee who finds herself in a situation where
she believes that personal reasons cannot be sacrificed in
favor of the exigency of the service and that she has no
other choice but to disassociate herself from
employment.41 The resignation must be unconditional and
with a clear intention to relinquish the
position.42 Consequently, the circumstances surrounding
the alleged resignation must be consistent with the
employee’s intent to give up the employment.43 In this
connection, the acts of the employee before and after the
resignation are considered to determine whether or not she
intended, in fact, to relinquish the employment.44
Article 282(c)50 of the Labor Code authorizes an employer
to dismiss an employee for committing fraud, or for willful
breach of the trust reposed by the employer. However, loss
of confidence is never intended to provide the employer
with a blank check for terminating its employee.51 For this to
be a valid ground for the termination of the employee, the
employer must establish that: (1) the employee must be
holding a position of trust and confidence; and (2) the act
complained against would justify the loss of trust and
confidence.52
There are two classes of employees vested with trust and
confidence. To the first class belong the managerial
employees or those vested with the powers or prerogatives
to lay down management policies and to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial
actions. The second class includes those who in the normal
and routine exercise of their functions regularly handle
significant amounts of money or property. Cashiers,
auditors, and property custodians are some of the
employees in the second class.53
2. JOB CONTRACTOR
Section 8, Rule VIII, Book III of the Implementing Rules and
Regulations of the Labor Code provides in part:
There is job contracting permissible under the Code if the
following conditions are met:
xxx xxx xxx
(2) The contractor has substantial capital or investment in
the form of tools, equipment, machineries, work premises,
and other materials which are necessary in the conduct of
his business.
Jurisprudence is firmly settled that whenever the existence
of an employment relationship is in dispute, four elements
constitute the reliable yardstick: (a) the selection and
engagement of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the employer's power to
control the employee's conduct.10 It is the so-called "control
test," and that is, whether the employer controls or has
reserved the right to control the employee not only as to the
result of the work to be done but also as to the means and
methods by which the same is to be accomplished,11 which
constitute the most important index of the existence of the
employer-employee relationship. Stated otherwise, an
employer-employee relationship exists where the person for
whom the services are performed reserves the right to
control not only the end to be achieved but also the means
to be used in reaching such end.12
Regular and Casual employment. — The provisions of
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 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.
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 actually exists.
As can be gleaned from this provision, there are 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.19
Project employees are not entitled to termination pay if they
are terminated as a result of the completion of the project or
5
any phase thereof in which they are employed, regardless
of the number of project in which they have been employed
by a particular construction company. Moreover, the
company is not required to obtain a clearance from the
Secretary of Labor in connection with such
termination. What is required of the company is a report to
the nearest Public Employment Office for statistical
purposes.
Jurisprudence abound as to the rule that the twin
requirements of due process, substantive and procedural,
must be complied with, before a valid dismissal exists.
Without which the dismissal becomes void.
The law requires that the employer must furnish the worker
sought to be dismissed with two written notices before
termination of employee can be legally effected: (1) notice
which apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the
employer's decision to dismiss him (Section 13, BP 130;
Sections, 2-6, Rule XIV, Book V Rules and Regulations
Implementing the Labor Code as amended), Failure to
comply with the requirements taints the dismissal with
illegality. This procedure is mandatory; in the absence of
which, any judgment reached by management is void and
inexistent. (Tingson, Jr. v. NLRC, 185 SCRA 498 [1990];
National Service Corporation v. NLRC, 168 SCRA 122
[1988]; Ruffy v. NLRC, 182 SCRA 365 [1990].
3. JEEPNEY OPERATORS & DRIVERS
It is already settled that the relationship between jeepney
owners/operators and jeepney drivers under the boundary
system is that of employer-employee and not of lessor-
lessee. The fact that the drivers do not receive fixed wages
but only get the amount in excess of the so-called
"boundary" that they pay to the owner/operator is not
sufficient to negate the relationship between them as
employer and employee.
Under a boundary scheme, the driver remits the
"boundary," which is a fixed amount, to the owner/operator
and gets to earn the amount in excess thereof. Thus, on a
day when there are many passengers along the route, it is
the driver who actually benefits from it. It would be unfair
then if, during the times when passengers are scarce, the
owner/operator will be made to suffer by not getting the full
amount of the boundary. Unless clearly shown or explained
by an event that irregularly and negatively affected the
usual number of passengers within the route, the scarcity of
passengers should not excuse the driver from paying the
full amount of the boundary.
4. PROJECT EMPLOYEES
A project employee under Article 280 (now Article 294)18 of
the Labor Code, as amended, 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, Thus:
Art, 280. Regular and Casual Employment. –The provisions
of written agreement for 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
Project or undertaking the completion or termination of "[T]he repeated and successive rehiring [of
which has been determined at the time of the engagement respondents as project-based employees] does not [also],
of the employee or where the work or service to be by and of itself: qualify them as regular employees. Case
performed is seasonal in nature and the employment is for law states that length of service (through rehiring) is not the
the duration of the season. controlling determinant of the employment tenure [of
project-based employees but, as earlier mentioned],
x x x x (Emphasis supplied) whether the employment has been fixed for a specific
project or unde1taking, with its completion having been
determined at the tin1e of [their] engagement." 123 Stated
The services of project-based employees are co-terminous otherwise the rule that employees initially hired on a
with the project and may be terminated upon the end or temporary basis may become permanent employees by
completion of the project or a phase thereof for which they reason of their length of service is not applicable to project-
were hired. 19 The principal test in determining whether based employees. Our ruling in Villa v. National Labor
particular employees were engaged as project-based Relations Commission 124 is instructive on the matter, viz.:
employees, as distinguished from regular employees, is
whether they were assigned to carry out a specific project
or undertaking, the duration and scope of which was
specified at, and made known to them, at the time of their
engagement. 20 It is crucial that the employees were
informed of their status 8rS project employees at the time of
hiring and that the period of their employment must be
knowingly and voluntarily agreed upon by the parties,
without any force, duress, or improper pressure being
brought to bear upon the employees or any other
circumstances vitiating their consent.

Performance by project-based Employees of task

necessary and Desirable to the usual business
Operation of the employer will not automatically result
in their regularization.

It is settled, however, that project-based employees may or

may not be performing tasks usually necessary or desirable
in the usual business or trade of the employer. The fact that
the job is usually necessary or desirable in the business
operation of the employer does not automatically imply
regular employment; neither does it impair the validity of the
project employment contract stipulating a fixed duration of
employment. 26 As this Court held in ALU-TUCP v. National
Labor Regulation Commission: 27

In the realm of business and industry, we note that ‘project’

could refer to one or the other of at least two (2)
distinguishable types of activities. Firstly, a project could
refer to a particular job or undertaking that is within the
regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such,
from the other undertaking of the company. Such job or
undertaking begins and ends at determined or determinable
times. The typical example of this first type of project is a
particular construction job or project of a construction
company. A construction company ordinarily carries out two
or more discrete identifiable construction projects: e,g., a
twenty-five-storey hotel in Makati; a residential
condominium building in Baguio City; and domestic air
terminal in Iloilo City. Employees who are hired for the
carrying out of one these separate projects, the scope and
duration of which has been determined and made known to
the employees at the time of employment are properly
treated as ‘project employees.’ and their services may be
lawfully terminated at completion of the project.

The term ‘project’ could also refer to, secondly, a particular

job or undertaking that is not within the regular business of
the corporation , Such a job or undertaking must also be
identifiably separate and distinct from the ordinary or
regular business operations of the employer. The job or
undertaking also begins and ends at determined or
determinable times. 28

Repeated rehiring of project employees to different

projects does not ipso facto make then regular
employees.