FACTS
New City Builders, Inc., a construction company, hired Reyman G. Minsola on December 16, 2008 as a laborer for the structural phase of its Avida Tower 3 Project. His employment contract stated that he was a project employee and that his employment would last until completion of the structural phase. On August 24, 2009, the structural phase was completed and Minsola's employment was terminated. The following day, New City re-hired him as a mason for the architectural phase of the same project.
In December 2009, New City discovered that Minsola had no appointment paper for his employment as a mason. It instructed him to update his employment records and, on January 20, 2010, summoned him to sign his appointment paper. Minsola refused, left the office, and did not report for work again. On January 26, 2010, he filed a complaint for illegal dismissal, underpayment of salary, nonpayment of 13th-month pay, separation pay, and refund of cash bond.
The Labor Arbiter dismissed the complaint for illegal dismissal, finding that Minsola was a project employee and that there was no evidence that he had been dismissed. It awarded him ₱2,652.00 as 13th-month pay differential. The NLRC reversed, finding Minsola to be a regular employee and holding that he had been constructively dismissed. It ordered his reinstatement with backwages and awarded salary differentials, service incentive leave pay differentials, and attorney's fees.
The Court of Appeals reversed the NLRC and reinstated the Labor Arbiter's decision. It held that Minsola was a project employee because he had been hired for specific phases of the Avida Tower 3 Project and that there was no proof that he had been constructively dismissed. Minsola then filed a petition for review on certiorari before the Supreme Court.
ISSUE
The first issue was whether Minsola was a project employee of New City Builders, Inc.
The second issue was whether Minsola was constructively dismissed by New City Builders, Inc.
The third issue was whether Minsola was entitled to his monetary claims consisting of salary differential, 13th-month pay differential, service incentive leave pay differential, holiday pay, and attorney's fees.
HELD
The Supreme Court PARTLY GRANTED the petition. It held that Minsola was a project employee. Under Article 294 of the Labor Code, employment is generally regular when an employee performs activities usually necessary or desirable in the employer's business, except when the employment has been fixed for a specific project or undertaking whose completion or termination was determined at the time of engagement. For project employment, the employer must prove that the employee was hired for a specific project or undertaking and was informed of its duration and scope.
The Court found that Minsola was informed of his project status through his employment contracts. He was first hired for the structural phase of Avida Tower 3 and later for its architectural phase. The contracts specified that his employment would end upon completion of the particular project or phase. The Court held that the fact that his work was necessary and vital to New City's construction business did not make him a regular employee. His service of more than one year and repeated rehiring likewise did not automatically result in regularization because he was a project employee in the construction industry.
The Court also held that Minsola was not constructively dismissed. Constructive dismissal exists when continued employment is rendered impossible, unreasonable, or unlikely, or when an act of discrimination, insensibility, or disdain makes continued employment unbearable. The Court found no act by New City showing that Minsola had been dismissed or prevented from returning to work. Rather, Minsola himself left the office and refused to report for work.
However, the Court held that Minsola was entitled to salary differentials, 13th-month pay differential, service incentive leave pay differential, and holiday pay. His daily wage of ₱260.00 was below the applicable minimum wage of ₱382.00 under Wage Order No. NCR-15. He was therefore awarded ₱41,616.64 salary differential, ₱310.00 service incentive leave pay differential, ₱2,652.00 13th-month pay differential, and ₱5,340.00 holiday pay. The Court also awarded 10% attorney's fees because the case included a claim for unlawfully withheld wages. Claims for premium pay for holidays and rest days and night-shift differential were denied for lack of factual basis.
The Supreme Court therefore modified the Court of Appeals' decision by awarding Minsola the salary differentials, service incentive leave pay differential, holiday pay, and 10% attorney's fees, in addition to the 13th-month pay differential previously awarded. The Labor Arbiter was ordered to prepare a comprehensive accounting of the monetary claims, with the total amount earning 6% legal interest per annum from finality of the decision until full satisfaction.
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