Omni Hauling Services, Inc. v.
Bon o Petitioner then terminated their employment,
G.R. No. 199388 | September 3, 2014
Perlas-Bernabe, J.
Nazario | X
PETITONERS:
Omni Hauling Services, Inc.
Lolita Franco and Aniceto Franco
RESPONDENTS:
Bernardo Bon, et. al.
TOPIC: Employee Classification—Project Employees—
Principal Test of Project Employment
CASE SUMMARY: Petitioners was awarded a one year
contract to provide garbage hauling services, and hired
respondents. After the duration of the contract, petitioner was
awarded another contract and sought to rehire respondents,
only if they signed contracts stating that they were to only be
rehired during the same duration. Respondents refused, stating
that they were regular employees and not project employees,
and were therefore dismissed.
Court ruled that an employment contract would have
proved whether or not respondents were project employees, as
such contract would have informed respondents of the duration
and scope of their employment, and their status as project
employees. The lack of such employment contract failed to
substantiate the petitioner’s claims, and in light of there being
no evidence to the contrary, respondents were deemed regular
employees for having rendered one year of service, and their
subsequent dismissal was deemed illegal.
FACTS:
 Petitioner Omni Hauling Services, Inc., owned by
petitioners Lolita and Aniceto Franco, was awarded a
one year service contract by the local government of
Quezon City to provide garbage hauling services for
the period July 1, 2002 to June 30,
o Omni hired respondents as garbage truck
drivers and paleros who were then paid on a
per trip basis.
 When the service contract was renewed for another
year, or for the period July 1, 2003 to June 30, 2004,
petitioners required the respondents to sign
employment contracts which provided that they will
be “rehired” only for the duration of the same period.
o Respondents refused to sign the employment
contracts, claiming that they were regular
employees.
which to led to the filing of illegal dismissal
cases against petitioners.
 LA: Respondents were not illegally dismissed—they
were informed that their employment will be limited
for a specific period of one year and was coterminous
with the service contract with the Quezon City
government. Thus, respondents were not regular but
merely project employees whose hiring was solely
dependent on the aforesaid service contract.
 NLRC: Affirmed LA ruling.
 CA: Reversed and set aside NLRC ruling. CA found
that NLRC dismissed the respondents on the grounds
that they were only project employees as alleged by the
petitioners.
o However, there exist no employment
contracts, and petitioners are unable to
substantiate their claims. This casts doubt on
whether respondents were properly
informed of their status as project employees,
as claimed by petitioners.
ISSUE: WON respondents are project employees as alleged by
petitioners, or regular employees.
RULING:
The Court found that the NLRC committed grave abuse of
discretion by dismissing respondents based on unsubstantiated
claims made by the petitioners regarding their employment.
Article 280 of the Labor Code distinguishes between regular,
and casual or project employment, wherein the latter is
“…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…”
A project employee is assigned to a project which
begins and ends at determined or determinable times, and
therefore may be lawfully terminated at the completion of the
project. The principal test for determining project employees
from regular employees is whether or not the employees were
assigned to carry out a “specific project or undertaking,” the
duration and scope of which were specified at the time they
were engaged for that project.
The project could either be (1) 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 undertakings of the
company; or (2) a particular job or undertaking that is not within
the regular business of the corporation. In order to prevent
employers from arbitrarily using the term “project” to prevent
employees from becoming regular, employers claiming that
their workers are project employees should not only prove that
the duration and scope of the employment was specified at the
time they were engaged, but also that there was indeed a project.
In this case, a written contract is proof that respondents
were informed of the duration and scope of their work and their
status as project employees. As such, its absence sheds doubt
upon the petitioners claims that respondents were project
employees. Since no other evidence was brought to substantiate
petitioners’ claim, there is a presumption of regular
employment as respondents have rendered one year of service,
and were engaged to perform activities which are usually
necessary or desirable in the usual business or trade of
petitioner.
Therefore, as respondents were regular employees, the
termination of their employment was a case of illegal dismissal
on the part of the petitioners.

DISPOSITIVE:

WHEREFORE, the petition is DENIED. The Decision dated

May 27, 2011 and the Resolution dated November 11, 2011 of the
Court of Appeals in C.A.-G.R. S.P. No. 111413 are hereby
AFFIRMED.

SO ORDERED.

PROVISIONS:
 LC 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 service 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 activity exists