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  • Sandoval Shipyards v. NLRC

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    Lorille Leones
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    This document is a Supreme Court decision regarding the dismissal of alleged project workers at Sandoval Shipyards. The Court held that the workers were project employees whose employment ended with the completion of each vessel construction project, rather than regular employees. It noted that Sandoval Shipyards only accepted contracts to build or repair vessels occasionally and did not have continuous production requiring permanent workers. Previous cases had also established that Sandoval Shipyards' workers were project employees whose jobs ended with each project.

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    Sandoval Shipyards v. Nlrc

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    Sandoval Shipyards v. Nlrc

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    This document is a Supreme Court decision regarding the dismissal of alleged project workers at Sandoval Shipyards. The Court held that the workers were project employees whose employment ended with the completion of each vessel construction project, rather than regular employees. It noted that Sandoval Shipyards only accepted contracts to build or repair vessels occasionally and did not have continuous production requiring permanent workers. Previous cases had also established that Sandoval Shipyards' workers were project employees whose jobs ended with each project.

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    © All Rights Reserved
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    63 views4 pages

    Sandoval Shipyards v. NLRC

    Uploaded by

    Lorille Leones
    This document is a Supreme Court decision regarding the dismissal of alleged project workers at Sandoval Shipyards. The Court held that the workers were project employees whose employment ended with the completion of each vessel construction project, rather than regular employees. It noted that Sandoval Shipyards only accepted contracts to build or repair vessels occasionally and did not have continuous production requiring permanent workers. Previous cases had also established that Sandoval Shipyards' workers were project employees whose jobs ended with each project.

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    of 4

    9/9/2019 SANDOVAL SHIPYARDS v.

    NLRC

    DIVISION

    [ GR No. 65689, May 31, 1985 ]

    SANDOVAL SHIPYARDS v. NLRC

    DECISION
    221 Phil. 360

    AQUINO, J.:
    These cases are about the dismissal of alleged project workers. Sandoval Shipyards,
    Inc. has been engaged in the building and repair of vessels. It contends that each
    vessel is a separate project and that the employment of the workers is terminated with
    the completion of each project.

    The workers contend otherwise. They claim to be regular workers and that the
    termination of one project does not mean the end of their employment since they can
    be assigned to unfinished projects.

    In G. R. No. 65689, Rogelio Diamante, Manuel Pacres, Macario Saputalo, Rolando


    Cervales and Dionisio Cervales were assigned to the construction of the LCT
    Catarman, Project No. 7511. After three months of work, the project was completed
    on July 26, 1979. The five workers were served a termination notice. The termination
    was reported to the Ministry of Labor on August 3, 1979. They filed a complaint for
    illegal dismissal.

    The National Labor Relations Commission affirmed the decision of the Labor Arbiter
    ordering the reinstatement of the five complainants with backwages from July 27,
    1979.

    In G. R. No. 66119, respondents Danilo de la Cruz, et al., 17 in all, were assigned to


    work in Project No. 7901 for the construction of a tanker ordered by Mobil Oil
    Philippines, Inc. There were 55 workers in that project. The tanker was launched on
    January 31, 1980. Upon the yard manager's recommendation, the personnel manager

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    9/9/2019 SANDOVAL SHIPYARDS v. NLRC

    of Sandoval Shipyards terminated the services of the welders, helpers and


    construction workers effective February 4, 1980. The termination was duly reported
    to the Ministry of Labor and Employment.

    Three days later, or on February 7, twenty-seven out of the 55 workers were hired for a
    new project. The 27 included four of the 17 respondents who filed a complaint for
    illegal dismissal on February 6.

    After hearing, the Director of the Ministry's Capital Region ordered the reinstatement
    of the complainants. The Deputy Minister of Labor affirmed that order.

    We hold that private respondents were project employees whose work was
    coterminous with the project for which they were hired. Project employees, as
    distinguished from regular or non-project employees, are mentioned in section 281 of
    the Labor Code as those "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".

    Policy Instructions No. 20 of the Secretary of Labor, which was issued to stabilize
    employer-employee relations in the construction industry, provides:
    "Project employees are those employed in connection with a particular
    construction project. Non-project (regular) employees are those employed by a
    construction company without reference to any particular project.

    "Project employees are not entitled to termination pay if they are terminated as a
    result of the completion of the project or any phase thereof in which they are
    employed, regardless of the number of projects in which they have been
    employed by a particular construction company. Moreover, the company is not
    required to obtain clearance from the Secretary of Labor in connection with such
    termination."

    The petitioner cited three of its own cases wherein the National Labor Relations
    Commission, Deputy Minister of Labor and Employment Inciong and the Director of
    the National Capital Region held that the layoff of its project employees was lawful.
    Deputy Minister Inciong in TFU Case No. 1530, In Re Sandoval Shipyards, Inc.
    Application for Clearance to Terminate Employees, rendered the following ruling on
    February 26, 1979:
    lawyerly.ph/juris/view/c692f 2/4
    9/9/2019 SANDOVAL SHIPYARDS v. NLRC

    "We feel that there is merit in the contention of the applicant corporation. To
    our mind, the employment of the employees concerned were fixed for a specific
    project or undertaking. For the nature of the business the corporation is engaged
    into is one which will not allow it to employ workers for an indefinite period.

    "It is significant to note that the corporation does not construct vessels for sale
    or otherwise which will demand continuous productions of ships and will need
    permanent or regular workers. It merely accepts contracts for shipbuilding or
    for repair of vessels from third parties and, only, on occasion when it has work
    contract of this nature that it hires workers to do the job which, needless to say,
    lasts only for less than a year or longer.

    "The completion of their work or project automatically terminates their


    employment, in which case, the employer is, under the law, only obliged to
    render a report on the termination of the employment." (139-140, Rollo of G. R.
    No. 65689).

    In NLRC Case No. RB-IV-7743-76, Nicanor San Pedro, et. al. vs. Sandoval
    Shipyards, Inc., the NLRC in its resolution of May 16, 1978 held that the layoff of the
    17 complainants (which include three respondents in G. R. No. 65689 and two
    respondents in G. R. No. 66119) after the construction of the tanker, M/T Oil Queen
    VII, in July, 1976 was justified because they were project employees (135-138, Rollo of
    G. R. No. 65689).

    In Gaspar vs. Sandoval shipyards, Inc., NCR-STF-3- 1840-81, Director Estrella held
    in his order dated June 22, 1981 that two workers of the petitioner were project
    workers whose employment was terminated upon the completion of the project.

    Respondent Deputy Minister Leogardo, Jr. himself on October 25, 1984 affirmed that
    finding. He ruled that the complainants "are project workers whose employments are
    coterminous with the completion of the project, regardless of the number of projects
    in which they have worked, as provided under Policy Instructions No. 20 of the
    Ministry of Labor and Employment" and "as their employment is one for a definite
    period, they are not entitled to separation pay". (187, Rollo of G. R. No. 65689)

    The public respondents in the instant two cases acted with grave abuse of discretion
    amounting to lack of jurisdiction in disregarding these precedents.
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    9/9/2019 SANDOVAL SHIPYARDS v. NLRC

    WHEREFORE, the NLRC resolution dated July 29, 1983 and the order of Deputy
    Minister Leogardo, Jr., dated March 15, 1983 are reversed and set aside. The
    complaints for illegal layoff are dismissed. No costs.

    SO ORDERED.

    Escolin, Cuevas, De La Fuente[*], and Alampay[*], JJ., concur.

    Makasiar, (Chairman), J.,reserves his vote.

    Concepcion, Jr., and Abad Santos, JJ., did not take part.

    [*] designated to sit in the Second Division

    lawyerly.ph/juris/view/c692f 4/4

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