DISPOSITIVE:

WHEREFORE, the instant petition is hereby DENIED. The December 22, 2010 Decision and September 26, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 103349 are AFFIRMED. The case is hereby ordered REMANDED to the labor arbiter for the computation of the amounts due each respondent.

So Ordered.

SUBJECTS/DOCTRINES/DIGEST:

WHAT HAPPENED IN THIS CASE?

AS PROOF THAT THE EMPLOYEES WERE PROJECT EMPLOYEES, THE EMPLOYER PRESENTED THE SERVICE CONTRACTS WITH THEIR CLIENT. NO OTHER SUBSTANTIAL EVIDENCE WAS PRESENTED. FURTHERMORE EMPLOYER FAILED TO PROVE TERMINATION REPORTS AT END OF EACH PROJECT. SUPREME COURT SAID THE EMPLOYEES WERE NOT PROJECT EMPLOYEES. THEREFORE THEY WERE ILLEGALLY DISMISSED.

Clearly, the presentation of service contracts between the employer and their client (even if it shows the duration of the project), in lieu of the employees’ individual employment contracts, does not establish that the latter are project employees. There was no other substantial evidence offered to prove that respondents were informed at the time of their hiring, that they were project employees. Moreover, petitioner’s failure to file termination reports at the end of each project was an indication that respondents were regular employees.46

In view of all the foregoing, pet1t1oner failed to prove through substantial evidence that respondents are project employees. It is evident that respondents were illegally dismissed due to petitioner’s failure to comply with the substantive and procedural due process tenets under the Labor Code.

WHAT IS THE TEST IN DETERMINING WHETHER AN EMPLOYEE IS A PROJECT EMPLOYEE?

The case of Olongapo Maintenance Services, Inc. v. Chantengco44 is more applicable:

The principal test in determining whether an employee is a project employee is whether he/she is assigned to carry out a “specific project or undertaking,” the duration and scope of which are specified at the time the employee is engaged in the project, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring.

In the instant case, the record is bereft of proof that the respondents’ engagement as project employees has been predetermined, as required by law. We agree with the Court of Appeals that OMSI did not provide convincing evidence that respondents were informed that they were to be assigned to a “specific project or undertaking” when OMSI hired them. Notably, the employment contracts for the specific project signed by the respondents were never presented. All that OMSI submitted in the proceedings a quo are the service contracts between OMSI and the MIAA. Clearly, OMSI utterly failed to establish by substantial evidence that, indeed, respondents were project employees and their employment was coterminous with the MIAA contract.45 (Citations omitted; Emphasis ours)

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