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Sandoval Shipyards v. NLRC
Sandoval Shipyards v. NLRC
NLRC
DIVISION
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.
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.
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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:
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"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.
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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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.
Concepcion, Jr., and Abad Santos, JJ., did not take part.
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