[Syllabus]

THIRDDIVISION

[G.R.No.114290.September9,1996]

RAYCORAIRCONTROLSYSTEMS,INC.,petitioner,vs.NATIONALLABORRELATIONSCOMMISSIONANDROLANDOLAYA,etal.,respondents.

DECISIONPANGANIBAN,J.:

Wereprivaterespondents,employedbypetitionerinitsbusinessofinstallingairconditioningsystemsinbuildings,projectemployeesorregularemployees?Andwere their dismissals "due to (petitioner's) present business status" and effective the day following receipt of notice legal? Where both the petitioner and therespondentsfailtopresentsufficientandconvincingevidencetoprovetheirrespectiveclaims,howshouldthecasebedecided?

ThisCourtanswerstheforegoingquestionsinresolvingthispetitionforcertiorariassailingtheDecision[1]

promulgatedNovember29,1993bytheNationalLabor

RelationsCommission,[2]

whichsetasideandreversedthedecisionofthelaborarbiter[3]

dated22January1993,aswellasthesubsequentorderofrespondentCommissiondenyingpetitioner'smotionforreconsideration.

TheFactsPetitioner's sole lineof business is installingairconditioning systems in thebuildingsof its clients. In connectionwith such installationwork, petitioner hired

privaterespondentsRobertoFulgencio,RolandoLaya,FlorencioEspina,RomuloMagpili,RamilHernandez,WilfredoBrun,EduardoReyes,CrisostomoDonompili,Angelito Realingo, Hernan Delima, Jaime Calipayan, Jorge Cipriano, Carlito de Guzman, Susano Atienza, and Gerardo de Guzman, who worked in variouscapacities as tinsmith, leadman, airconmechanic, installer,welder and painter. Private respondents insist that they had been regular employees all along, butpetitionermaintainsthattheywereprojectemployeeswhowereassignedtoworkonspecificprojectsofpetitioner,andthatthenatureofpetitioner'sbusinessmereinstallation (not manufacturing) of aircon systems and equipment in buildings of its clients prevented petitioner from hiring private respondents as regularemployees.Asfoundbythelaborarbiter, theiraveragelengthofservicewithpetitionerexceededoneyear,withsomerangingfromtwotosixyears(butprivaterespondentsclaimmuchlongertenures,someallegedlyexceedingtenyears).

In1991,privaterespondentLayaandfourteenotheremployeesofpetitionerfiledNLRCNCRCaseNo.00030208092fortheir"regularization".Thiscase,was

http://sc.judiciary.gov.ph/jurisprudence/1996/syllabus/sept/114290_syl.htm

dismissedonMay20,1992forwantofcauseofaction.[4]

Ondifferentdatesin1992,theywereservedwithuniformlywordednoticesof"TerminationofEmployment"bypetitioner"duetoourpresentbusinessstatus",whichterminationsweretobeeffectivethedayfollowingthedateofreceiptofthenotices.Privaterespondentsfelttheyweregiventheirwalkingpapersaftertheyrefused to signa "ContractEmployment" providing for, amongothers, a fixedperiodof employmentwhich "automatically terminateswithout necessity of furthernotice"orevenearlieratpetitioner'ssolediscretion.

Becauseofthetermination,privaterespondentsfiledthreecasesofillegaldismissalagainstpetitioner,allegingthatthereasongivenfortheterminationoftheiremploymentwasnotoneofthevalidgroundsthereforundertheLaborCode.Theyalsoclaimedthattheterminationwaswithoutbenefitofdueprocess.

Thethreeseparatecasesfiledbyprivaterespondentsagainstpetitioner,docketedasNLRCNCR00030593092,NLRCNCR00050278992,andNLRCNCR00070369992,weresubsequentlyconsolidated.Thepartiesweregivenopportunitytofiletheirrespectivememorandaandothersupplementalpleadingsbeforethelaborarbiter.

OnJanuary22,1993,theLaborArbiterissuedhisdecisiondismissingthecomplaintsforlackofmerit.Hereasonedthattheevidenceshowedthattheindividual

complainants (private respondents)wereproject employeeswithin themeaningofPolicy InstructionsNo.20 (seriesof 1977)[5]

of theDepartmentof LaborandEmployment,havingbeenassignedtoworkonspecificprojectsinvolvingtheinstallationofairconditioningunitsascoveredbycontractsbetweentheiremployerandthe latter'sclients. Necessarily, the installationofairconditioningsystems"mustcometoahaltasprojectscomeandgo",and"(o)fconsequence, the [petitioner]cannothireworkersinperpetuity.Andasprojectemployees,privaterespondentswouldnotbeentitledtoterminationpay,separationpay,holidaypremiumpay,etc.andneitheristheemployerrequiredtosecureaclearancefromtheSecretaryofLaborinconnectionwithsuchtermination.

PrivaterespondentsappealedtotherespondentNLRC,which in itsNovember29,1993Decisionreversedthearbiterand foundprivate respondents tohavebeenregularemployeesillegallydismissed.TherespondentCommissionmadethefollowingfourparagraphdisquisition:

"Fromtheaboverules,itcaneasilybegleanedthatcomplainantsbelongtoaworkpoolfromwhichtherespondentcompanydrewitsmanpowerrequirements.Thisisbuttressedbythefactthatmanyofthecomplainantshavebeenemployedforlongperiodsoftimealready.

Wedoubtrespondent'sassertionthatcomplainantswerereallyassignedtodifferentprojects.The'ContractEmployment'whichitsubmitted(seepp.3238,record)purportingtoshowparticularprojectsarenotreliablenayevenappearstohavebeencontrived.Thenamesoftheprojectsclearlyappeartohavebeenrecentlytypewritten.Inthe'ContractEmployment'submittedbycomplainants(seep.65,record),nosuchnameofprojectappears.Verily,complainantswerenonprojectemployees.

Anentthedismissalofcomplainants,sufficeittostatethatthesamewascapriciousandwhimsicalasshownbythevaguereasonprofferedbyrespondentforsaiddismissalwhichis'duetoourpresentbusinessstates'(shouldread'status')isundoubtedlynotoneofthevalidcausesforterminationofanemployment.Wearethusinclinedtogivecredencetocomplainants'allegationthattheywereeasedoutofworkfortheirrefusaltosigntheonesided'ContractEmployment.'

Thefactthatcomplainantsweredismissedmerelytospitethemismademoremanifestbyrespondent'sfailuretomakeareportofdismissalorsecureaclearancefromtheDepartmentofLabor(seepp.196and197,record)asrequiredunderP.I.No.20andtheirpublicationofanadvertisementforreplacementsforthesamepositionsheldbycomplainants(seep.298,record).Evenassumingthatcomplainantswereprojectemployees,theirunceremoniousdismissalcoupledwiththeattempttoreplacethemviathenewspaperadvertisemententitlesthemtoreinstatementwithbackwagesunderP.I.,No.20."

Thedispositiveportionfollowedimmediatelyandread:

"WHEREFORE,theappealedDecisionisherebySETASIDEandanewoneenteredorderingrespondentto:

1.Immediatelyreinstatecomplainants(privaterespondents)totheirformerpositionswithoutlossofseniorityrightsandprivilegesand

2.Paythemfullbackwagesfromthetimetheyweredismisseduptothetimetheyareactuallyreinstated."

Petitioner'smotionforreconsiderationwasdeniedbypublicrespondentonFebruary23,1994forlackofmerit.Hence,thispetition.

IssuesPetitioner charges public respondent NLRCwith grave abuse of discretion in finding private respondents to have been nonproject employees and illegally

dismissed,andinorderingtheirreinstatementwithfullbackwages.

Forclarity'ssake, letusrestatethepivotalquestionsinvolvedintheinstantcaseasfollows: whetherprivaterespondentswereprojectemployeesorregular(nonproject)employees,andwhetherornottheywerelegallydismissed.

In support of its petition, petitioner reiterates the samepoints it raisedbefore the tribunalsbelow: that it is engaged solely in the business of installation ofairconditioningunitsorsystemsinthebuildingsofitsclients.Ithasnopermanentclientswithcontinuousprojectswhereitsworkerscouldbeassignedneitherisitamanufacturingfirm.Mostofitsprojectslastfromtwotothreemonths.(Theforegoingmatterswerenevercontrovertedbyprivaterespondents.)Thus,forpetitioner,workis"notdoneinperpetuitybutnecessarilycomestoahaltwhentheinstallationofairconditioningunitsiscompleted."

Onthebasisoftheforegoing,petitionerassertsthatitcouldnothavehiredprivaterespondentsasanythingotherthanprojectemployees.Itfurtherinsiststhat"(a)ttheincipienceofhiring,privaterespondentswereappraised(sic)thattheirworkconsistedonlyintheinstallationofairconditioningunitsandthatassoonastheinstallation iscompleted, theirworkceasesandthat theyhave towait foranother installationprojects(sic)." Inotherwords, theirworkwascoterminouswith thedurationoftheproject,andwasnotcontinuousoruninterruptedasclaimedbythem.Petitioneralsoclaimsthattheprivaterespondentssignedprojectcontractsofemploymentindicatingthenamesoftheprojectsorbuildingstheyareworkingon.Andwhenbetweenprojects,thereprojectemployeeswerefreetoworkelsewherewithotherestablishments.

Privaterespondentscontrovertedtheseassertionsofpetitioner,claimingthattheyhadworkedcontinuouslyforpetitionerforseveralyears,someofthemaslongastenyears,andthus,byoperationoflawhadbecomeregularemployees.

TheCourt'sRuling

Ordinarily,thefindingsmadebytheNLRCareentitledtogreatrespectandareevenclothedwithfinalityanddeemedbindingonthisCourt,exceptthatwhensuchfindingsarecontrarytothoseofthelaborarbiter,thisCourtmaychoosetoreexaminethesame,asweherebydointhiscasenor.

TheFirstIssue:ProjectEmployeesorRegularEmployees?

AnUnfoundedConclusion

Wescoured theassailedDecision forany traceofarbitrariness,capriciousnessorgraveabuseofdiscretion,andnoted that therespondentCommission firstcitedthefactsofthecase,thenquotedpartofthearbiter'sdisquisitionalongwithrelevantportionsofPolicyInstructionsNo.20,afterwhichitimmediatelyleapttotheconclusionthat"(F)romtheaboverules,itcaneasilybegleanedthatcomplainantsbelongtoaworkpoolfromwhichtherespondentcompanydrewitsmanpowerrequirements.Thisisbuttressedbythefactthatmanyofthecomplainantshavebeenemployedforlongperiodsoftimealready."(underscoringsupplied)Byreasonofsuch"finding", respondentNLRCconcludedthatprivaterespondentswere regular(notproject)employees,but failed to indicate thebasis forsuch findingandconclusion.Forourpart,wecombedtheDecisioninsearchofsuchbasis.However,repeatedscrutinyoftheprovisionsofPolicyInstructionsNo.20pertainingtoworkpoolsmerelyraisedfurtherquestions.

"Membersofaworkpoolfromwhichaconstructioncompanydrawsitsprojectemployees,ifconsideredemployeesoftheconstructioncompanywhileintheworkpool,arenonprojectemployeesoremployees foran idefiniteperiod. If theyareemployed inaparticularproject, thecompletionof theprojectorofanyphasethereofwillnotmeanseveranceofemployeremployeerelationship.

However, if theworkers intheworkpoolarefreeto leaveanytimeandoffer theirservicestootheremployersthentheyareprojectemployeesemployedbyaconstructioncompanyinaparticularprojectorinaphasethereof."Acarefulreadingoftheaforequotedandprecedingprovisionsestablishesthefactthatprojectemployeesmayormaynotbemembersofaworkpool,(thatis,the employer may or may not have formed a work pool at all), and in turn, members of a work pool could be either project employees or regularemployees.Intheinstantcase,respondentNLRCdidnotindicatehowprivaterespondentscametobeconsideredmembersofaworkpoolasdistinguishedfromordinary(nonworkpool)employees.Itdidnotestablishthataworkpoolexistedinthefirstplace.Neitherdiditmakeanyfindingastowhetherthehereinprivaterespondentswere indeed free to leave anytime and offer their services to other employers, as vigorously contended by petitioner, despite the fact that such adeterminationwouldhavebeencriticalindefiningtheprecisenatureofprivaterespondents'employment.Clearly,theNLRC'sconclusionofregularemploymenthasnofactualsupportandisthusunacceptable.

ConclusionBasedonUnwarrantedAssumptionofBadFaith

Immediatelythereafter,respondentCommissiondeterminedwithoutsufficientbasisthatcomplainantswerenonprojectemployees.Wequote:

"Wedoubtrespondent's(petitioner's)assertionthatcomplainants(privaterespondents)werereallyassignedtodifferentprojects.The"ContractEmployment"whichitsubmitted(seepp.3238,record)purportingtoshowparticularpojectsarenotreliablenayevenappearstohavebeencontrived.Thenamesoftheprojectsclearlyappeartohavebeenrecentlytypewritten.Inthe'ContractEmployment'submittedbycomplainants(seep.65,record),nosuchnameofprojectappears.Verily,complainantswerenonprojectemployees."(underscoringsupplied)

ThebasisforrespondentNLRC'sstatementthatthecontractswerecontrivedwasthefactthatthenamesofprojectsclearlyappearedtohavebeentypedinonly

afterthecontractshadbeenprepared.However,ourexaminationofthecontracts(presentedbypetitionerasAnnexes"A","B","B1","C","D","E"and"F"[6]

toitsPositionPaperdatedJuly30,1992filedwiththelaborarbiter)didnotleadinexorablytotheconclusionthatthesewere"contrived".SaidAnnexeswerephotocopies

of photocopiesof theoriginal "ContractEmployments",[7]

and thenamesof projects hadbeen typedonto thesephotocopies,meaning that theoriginals of saidcontractsprobablydidnotindicatetheprojectnames.Butthisalonedidnotautomaticallyornecessarilymeanthatpetitionerhadcommittedanyfalsehoodorfraud,orhadanyintenttodeceiveorimposeuponthetribunalsbelow,becausethenamesoftheprojectscouldhavebeentyped/filledingoodfaith,nuncprotunc,inordertosupplythedatawhichoughttohavebeenindicatedintheoriginalsatthetimethosewereissued,butwhichforsomereasonorotherwereomitted.Inshort,thenamesofprojectscouldhavebeenfilledinsimplyinordertomakethecontractsspeakthetruthmoreclearlyorcompletely.Notably,noreasonwasadvancedfornotaccordingthepetitionerthepresumptionofgoodfaith.RespondentNLRC,then,madeanunwarrantedassumptionthatbadfaithandfraudulentintentattendedthefillinginoftheprojectnamesinsaidAnnexes.Inanyevent,itcanbeeasilyandclearlyestablishedwiththeuseofthenakedeyethatthedatesanddurationsoftheprojectsand/orworkassignmentshadbeen typed into theoriginalcontracts,and therefore,petitioner's failure to indicate in theoriginalsof thecontracts thename(s)oftheproject(s)towhichprivaterespondentswereassigneddoesnotnecessarilymeanthattheycouldnothavebeenprojectemployees.(Incidentally,weshouldmakementionherethatwhatisorisnotstatedinacontractdoesnotcontrolnorchangetheJuridicalnatureofanemploymentrelationshipsincethesameisdeterminedandfixedbylaw.Asamatteroffact,wenotethatthereisnorequirementinPolicyInstructionsNo.20thatprojectemployeesshouldbeissuedwrittencontractsofemployment,letalonethatawrittencontractshouldindicatethenameoftheprojecttowhichtheemployeeconcernedisbeingassigned.)

StatutoryBasisforDeterminingNatureofEmployment

Thepartiesandtheirrespectivecounsel,aswellasrespondentCommissionandtheSolicitorGeneral,shouldhaverereadandcarefullystudiedALUTUCPvs.

NationalLaborRelationsCommission,[8]

whichishighlyinstructionalonthisquestion:

"ThelawonthematterisArticle280oftheLaborCodewhichreadsinfull:

'Article280.RegularandCasualEmploymentTheprovisionsofthewrittenagreementtothecontrarynotwithstandingandregardlessoftheoralagreementoftheparties,anemploymentshallbedeemedtoberegularwheretheemployeehasbeenengagedtoperformactivitieswhichareusuallynecessaryordesirableintheusualbusinessortradeoftheemployer,exceptwheretheemploymenthasbeenfixedforaspecificprojectorundertakingthecompletionorterminationofwhichhasbeendeterminedatthetimeoftheengagementoftheemployeeorwheretheworkorservicestobeperformedisseasonalinnatureandtheemploymentisforthedurationoftheseason.

Anemploymentshallbedeemedtobecasualifitisnotcoveredbytheprecedingparagraph:Provided,That,anyemployeewhohasrenderedatleastoneyearofservice,whethersuchserviceiscontinuousorbroken,shallbeconsideredaregularemployeewithrespecttotheactivityinwhichheisemployedandhisemploymentshallcontinuewhilesuchactivityexists.'xxx

xxxxxxxxx

xxxFor,asisevidentfromtheprovisionsofArticle280oftheLaborCode,quotedearlier,theprincipaltestfordeterminingwhetherparticularemployeesareproperlycharacterized

as'projectemployees'asdistinguishedfrom'regularemployees,'iswhetherornotthe'projectemployees'wereassignedtocarryouta'specificprojectorundertaking,'theduration(andscope)ofwhichwerespecifiedatthetimetheemployeeswereengagedforthatproject.(underscoringours)

Intherealmofbusinessandindustry,wenotethat'project'couldrefertoxxxaparticularjoborundertakingthatiswithintheregularorusualbusinessoftheemployercompany,butwhichisdistinctandseparate,andidentifiableassuch,fromtheotherundertakingsofthecompany.Suchjoborundertakingbeginsandendsatdeterminedordeterminabletimes.Thetypicalexampleofthisxxxtypeofprojectisaparticularconstructionjoborprojectofaconstructioncompany.Aconstructioncompanyordinarilycarriedouttwoormorediscreteidentifiableconstructionprojects:e.g.,atwentyfive.storyhotelinMakatiaresidentialcondominiumbuildinginBaguioCityandadomesticairterminalinIloiloCity.Employeeswhoarehiredforthecarryingoutofoneoftheseseparateprojects,thescopeanddurationofwhichhasbeendeterminedandmadeknowntotheemployeesatthetimeofemployment,areproperlytreatedas'projectemployees,'andtheirservicesmaybelawfullyterminatedatcompletionoftheproject."

Thesamedecisiongoesontosay:[9]

"xxxThesimplefactthattheemploymentofpetitionersasprojectemployeeshadgonebeyondone(1)year,doesnotdetractfrom,orlegallydissolve,theirstatusasprojectemployees.ThesecondparagraphofArticle280oftheLaborCode,quotedabove,providingthatanemployeewhohasservedforatleastone(1)year,shallbeconsideredaregularemployee,relatestocasualemployees,nottoprojectemployees.

InthecaseofMercado,Sr.vs.NationalLaborRelationsCommission(201SCRA332[1991]),thisCourtruledthattheprovisointhesecondparagraphofArticle280relatesonlytocasualemployeesandisnotapplicabletothosewhofallwithinthedefinitionofsaidArticle'sfirstparagraph,i.e..projectemployees.xxx"

Incidentally,weshouldmentionthatbothrespondentCommissionandtheSolicitorGeneralwereinerrorinconcludingbasedonprivaterespondents'claimedlengthofemployment(allegedlyforovertenyears)thattheywereregularemployees.Sadtostate,theSolicitorGeneralinhisargumentstriedto"forcefit"privaterespondentsintothe"regularemployee"categoryandcompletedlydisregardedthecriticaldistinctionssetforthinALUTUCPandearliercases.

InconclusiveEvidence

Basedontheforegoingconsiderations,itispatentthat,intheinstantcase,thereneedstobeafindingastowhetherornotthedurationandscopeoftheprojectorprojectsweredeterminedorspecifiedandmadeknowntohereinprivaterespondentsatthetimeoftheirengagement.Thelaborarbitertriedtodothis,relying

heavilyonthe"Contract(s)Employment"presentedinpetitioner'sAnnexesaswellasonprivaterespondents'ownAnnex"A"[10]

attachedtotheirPositionPaper,andcitingthefactthatthesaidcontractsofemploymentindicatedthedurationoftheprojectstowhichtheprivaterespondentshadbeenassigned.Hethenheldthat

"(t)hereisnodenialthatcomplainantswereassignedtoworkintheseprojects,"[11]

andconcludedthattheywereindeedprojectemployees.

But thearbiter completed ignored the fact that all the "Contract(s)Employment"presented inevidencebybothpetitionerandprivate respondentshadbeensignedonlybypetitioner'spresidentandgeneralmanager,LuisF.Ortega,butnotbytheemployeesconcerned,whohadpreciselyrefusedtosignthem.Thesaidcontractsthereforecouldinnowisebedeemedconclusiveevidence.Thus,privaterespondentsfaultedthelaborarbiterforgivingcredenceandprobativevaluetosaidcontracts. Besides, they claimed, only seven contracts in allwere presented in evidence, pertaining to seven individual employees,while there are fifteen

employeesinvolvedinthecomplaints.Moreover,thesecontracts,purportedlyissuedeitherinJulyorDecemberof1991,exceptforonedatedMay1992),werealloneshot contracts of short duration, the longest being for about five months. Now, inasmuch as petitioner had not denied nor rebutted private respondents'allegationsthattheyhadeachworkedseveralyearsforthepetitioner,theobviousquestionis,whydidn'tpetitionerproduceinevidencesimilarcontractsforalltheotheryearsthatprivaterespondentshadworkedasprojectemployees?Tothesepoints,petitionerofferednoexplanationwhatsoever.

FailuretoDischargeBurdenofProof

For thatmatter, itseemsselfevident to thisCourt that,even if thecontractspresentedbypetitionerhadbeensignedbytheemployeesconcerned,still, theywouldnotconstituteconclusiveproofofpetitioner'sclaim.Afterall,intheusualschemeofthings,contracttermsarenormallydictatedbytheemployerandsimplyaccededtoandacceptedbytheemployee,whomaybedesperateforworkandthereforeinnopositiontobargainfreelyornegotiatetermstohisliking.

Inanyevent,petitionerinthiscaseundoubtedlycouldhavepresentedadditionalevidencetobuttressitsclaim.For instance,petitionercouldhavepresentedcopies of its contractswith its clients, to show the time, duration and scope of past installation projects. The data from these contracts could then have been

correlatedtothedatawhichcouldbefoundinpetitioner'spayrollrecordsfor,letussay,thepastthreeyearsorso,[12]

toshowthatprivaterespondentshadbeenworkingintermittentlyasandwhentheywereassignedtosaidprojects,andthattheircompensationhadbeencomputedonthebasisofsuchwork.Butpetitionerdidnotproducesuchadditionalevidence,andwefindthatitfailedtodischargeitsburdenofproof.

It isnotsomuchthatthisCourtcannotappreciatepetitioner'scontentionsaboutthenatureofitsbusinessanditsinabilitytomaintainalargeworkforceonitspermanentpayroll.Privaterespondentshaveadmittedthatpetitionerisengagedonlyintheinstallation(notmanufacture)ofairconsystemsorunitsinbuildings,andsincesuchalineofbusinesswouldobviouslybehighly(ifnotwholly)dependentontheavailabilityofbuildingsorprojectsrequiringsuchinstallationservices,whichfactornobusinessman,nomatterhowsavvy,canaccuratelyforecastfromyeartoyear,itcanbeeasilysurmisedthatpetitioner,awarethatitsrevenuesandincomewouldbeunpredictable,wouldalwaystrytokeepitsoverheadcoststoaminimum,andwouldnaturallywanttoengageworkersonaperprojectorperbuildingbasisonly,retainingveryfewemployees(ifany)onitspermanentpayroll.Itwouldalsohavebeenmorethangladifitsemployeesfoundotheremploymentelsewhere,inbetweenprojects.Toourmind,itappearsratherunlikelythatpetitionerwouldkeepprivaterespondentsallfifteenofthemcontinuouslyonitspermanentpayrollfor,say, tenor twelveyears,knowing fullywell that therewouldbeperiods(ofuncertainduration)whennoprojectcanbehad. To illustrate, letusassume thatprivaterespondents(whowereeachmakingaboutP118.00toP119.50perdayin1991)werepaidonlyP100.00perday.Ifthefifteenwere,astheyclaimed,regularemployeesentitled to theirwages regardlessofwhetherornot theywereassigned toworkonanyproject, theoverhead for their salariesalone computedatP100.00/day for30days inamonthwouldcometono less thanP45,000.00amonth,orP540,000.00ayear,notcounting13thmonthpay,Christmasbonus,SSS/Medicarepremiumpayments,sickleavesandserviceincentivesleaves,andsoforth.Evenifpetitionermayhavebeenabletoaffordsuchoverheadcosts,itcertainlydoesnotmakebusinesssenseforitoranyoneelsetodoso,andisineverysensecontrarytohumannature,nottomentioncommonbusinesspractice.Onthis score alone,we believe that petitioner could havemade out a strong case. Which iswhywe have difficulty understanding its failure to present clear and

convincingevidenceonthispoint,itbeingdoctrinalthatinillegaldismissalcases,theemployeralwayshastheburdenofproof.[13]

Petitioner'sproblemofweakevidencewasfurthercompoundedbycertaindocumentaryevidenceintherecordsbelowwhichcontrovertedpetitioner'sposition,or,attheveryleast,tendedtoconfuseratherthanclarifymatters.Forinstance,wenotedthatintheirMemorandumofAppealdatedFebruary17,1993filedwiththerespondentCommission,hereinprivaterespondentshadattachedasannexestheretothefollowingdocuments:

1.AsAnnex "B" thereof,aCertificationdatedJanuary28,1992,signedbyoneFloraP.Perez,Administrative/AccountantofRaycor,certifying that "xxxMr.RobertoB.

Fulgencio(oneoftheprivaterespondents)hasbeenconnectedwiththeundersignedcorporation(Raycor)fromAugust22,1986toMay18,1991andSeptember01,1990toJanuary25,1992asAirconInstaller"

2.AsAnnex"C"thereof,aCertificationdatedMay7,1985,signedbyLuisF.Ortega,PresidentandGeneralManagerofhereinpetitionercorporation,totheeffectthat"xxxMr.JaimeCalipayan(anotheroneoftheprivaterespondents)hasbeenconnectedwiththeundersignedcorporationfromJune18,1982uptopresentasaMechanicalInstallerand

3.AsAnnex"D"thereof,aCertificationdatedJune06,1991,likewisesignedbyLuisG.Ortega,presidentandgeneralmanagerofRaycor,certifyingthat"xxxMr.SusanoA.Atienza (still another of the private respondents) has been connected with the undersigned corporation from October 10, 1983 up to present as AirconMechanic/Technician".

Understandably,privaterespondentsmadebigcapitaloutofthesecertifications.But,whilepetitionerfailedutterlytoofferrebuttingevidence,stillandall,wearenotpreparedtoconcludeonthebasisofthesecertificationsalonethatprivaterespondentswereindeedregularemployees.Firstofall,saidcertificationsreferonlytothreeoutofthefifteenprivaterespondents,sowhatcouldbetrueofthemmaynotnecessarilyapplywithrespecttotheothertwelve.Moreover,thecertificationsdo not categorically state that the three employees had been permanent employees of Raycor. In other words, they do not necessarily overturn petitioner'scontention thatprivaterespondentswereprojectemployees,since it isstillpossible to read thedocumentsasaying that thenamedemployeeswereworkingasprojectemployeesduringtheperiodsthereinspecified.Thisisespeciallysosincethesaidcertificationswerepreparedbynonlawyerswhoinalllikelihoodwerenotawareofthepotentiallegalimplicationsandramificationsofwhatwereostensiblyinnocuouscertifications.Asheldinonerecentcase,"xxxitishowevernotdifficulttounderstandthatordinarybusinessactivitiesareperformedinthenormalcoursewithoutanticipationnorforeknowledgeoflitigation,oftenwithdispatchandusually

withaminimumofdocumentation.[14]

Nonetheless,allthingsconsidered,thecertifications,issuedbypetitioneritself,tendtoputitsclaimsinseriousdoubt.Thesituationwasstill furtheraggravatedby themanner inwhichpetitionerdismissedprivaterespondents. As foundbyrespondentCommission, thereason

givenforthedismissals,i.e.,"duetoourpresentbusinessstatus,"isvague,tosaytheleast,andunarguablyisnotoneofthevalidorjustcausesprovidedbylawforterminationofanemployment,whateveritsclassification.Butmoresignificantlyifindeedprivaterespondentswereprojectemployees,therewouldhavebeennoneedto terminate thembysending themnoticesof termination, inasmuchas theiremploymentceases"asaresultof thecompletionof theprojectoranyphasethereof inwhich they are employed," perPolicy InstructionNo. 20 itself. Thus, if petitioner resorted to such dismissals, there is the unavoidable inference thatpetitionerregardedtheprivaterespondentsasregularemployeesafterall.Butagain, this is inconclusive,sincethenoticesof terminationweresigned,andinalllikelihoodprepared,bythepresidentandgeneralmanagerofpetitioner,probablysansanylegaladviceorawarenessoftheimplicationsofsuchamove.

Alltheaforesaidconflictingdatahavetheneteffectofcastingdoubtuponandcloudingtherealnatureoftheprivaterespondents'employmentstatus.Andwearemandatedbylawtoresolvealldoubtsinfavoroflabor.Forwhichreason,weherebyholdthatprivaterespondentswereregularemployeesofthepetitioner.

HavingarrivedatbasicallythesameresultsasrespondentNLRCwithrespecttoprivaterespondents'employmentstatus,didthisCourtwasteitstimeandeffortinreexaminingtheinstantcase?Theanswerisinthenegative,thisCourtcannotaffirmadecisionorjudgmentbasedonerroneousfindingsandconclusions,forjusticecanneverbeadequatelydispensedtoallpartiesifajudgmentisnotgroundedonthetruth.

SecondIssue:TerminationsIllegal

Onthesecondissueofallegedillegalityofthesubjectdismissals,weagreewithrespondentCommissionwhenitheld,asmentionedabove,that"thesamewas

capriciousandwhimsicalasshownbythevaguereasonprofferedbyrespondentforsaiddismissalwhichis'duetoourpresentbusinessstates'(shouldread'status')is undoubtedly not one of the valid causes for termination of an employment." True indeed, for neither trhe Labor Code nor Policy Instructions No. 20 allowsterminationonsuchground.EvenArt.283of theLaborCodeasamended,whichtreatsofretrenchmentsandclosuresduetobusiness losses,requiresthat theemployerfirstservewrittennoticeontheworkersandtheDepartmentofLaboratleastonemonthbeforetheintendeddatethereofandincertaincases,separation

paymustbepaid.Anditcannotbedeniedthatintheinstantcase,petitionerdidnotaffordthemdueprocessthruthetwinrequirementsofnoticeandhearing,[15]

astheterminationstookeffectthedayfollowingreceiptofthenoticesoftermination. Ineluctably, thesaidterminationsarenot inaccordancewith lawandthereforeillegal.

Ontopofthat,thereisevidenceofthebadfaithofpetitionerinterminatingtheprivaterespondents.Petitionerplacedanad[16]

intheclassifiedadssectionof

thePeople'sJournal,sometimeinJune1992[17]

whichread:

"WANTEDIMMEDIATELYMECHANICALINSTALLERS

TINSMITHSWELDERS/PIPEFITTERS

APPLYINPERSON:

RAYCORAIRCONTROLSYSTEMS,INC.

RM30620THCENTURYBLDG.632SHAWBLVD.,MAND.

METROMANILA"

Unmistakably, petitioner, in placing the ad, must have had at least one project, maybe more, "in the pipeline" at that time, and was clearly in need ofreplacementsforprivaterespondentswhomithadjustfired.Thus,thedismissalscouldhardlyhavebeenduetoavalidcause,notevenduetopetitioner'salleged"presentbusinessstatus".Onthiscountaswell,thedismissalswereillegal.

Andlastly,weshouldmentionthatanorderforreinstatementwithpaymentofbackwagesmustbebasedonthecorrectpremises.Thispointisbestillustratedbyconsideringthelastratiocinationutilizedbypublicrespondent:"Evenassumingthatcomplainantswereprojectemployees,theirunceremoniousdismissalcoupledwiththeattempttoreplacethemviathenewspaperadvertisemententitlesthemtoreinstatementwithbackwagesunderP.I.No.20."Thereisaworldofdifferencebetweenreinstatementasprojectemployeesandreinstatementasregularemployees,butthedifferencewasobviouslylostontherespondentNLRC.

Conclusion

WereiteratethatthisCourtwadedthroughtherecordsofthiscasesearchingforsolidevidenceuponwhichtodecidethecaseeitherway.Butalltold,neitherpartymanagedtomakeoutaclearcase.Therefore,consideringthatinillegaldismissalcases,theemployeralwayshastheburdenofproof,andconsideringfurtherthatthelawmandatesthatalldoubts,uncertainties,ambiguities,andinsufficienciesberesolvedinfavoroflabor,weperforceruleagainstpetitionerandinfavorof

privaterespondents.

WHEREFORE,theforegoingconsidered,theassailedDecisionisherebySETASIDEandanewonerenderedholdingthatpetitionerhadfailedtodischargeitsburdenofproofintheinstantcaseandthereforeORDERINGthereinstatementofprivaterespondentsasregularemployeesofpetitioner,withoutlossofseniorityrightsandprivilegesandwithpaymentofbackwagesfromthedaytheyweredismisseduptothetimetheyareactuallyreinstated.Nocosts.

SOORDERED.Narvasa,C.J.(Chairman),Davide,Jr.,Melo,andFrancisco,JJ.,concur.

[1]Rollo,pp.3442.

[2]FirstDivision,composedofComm.VicenteS.E.Veloso,ponente,andPres.Cormn.BartolomeS.CaraleandComm.AlbertoR.Quimpo,concurring.

[3]OswaldB.Lorenzo.

[4]Rollo,p.24.

[5]PolicyInstructionsNo.20(seriesof1977),entitled"StabilizingEmployerEmployeeRelationsintheConstructionIndustry",providesinrelevantpart:

"Intheinterestofstabilizingemployeremployeerelationsintheconstructionindustryandtakingintoconsiderationitsuniquecharacteristics,thefollowingpolicyinstructionsareherebyissuedfortheguidanceofallconcerned:Generally,therearetwotypesofemployeesintheconstructionindustry,namely:1)Projectemployees,and2)NonProjectemployees.

Projectemployeesare thoseemployed inconnectionwithaparticularconstructionproject. Nonproject employeesare thoseemployedbya construction companywithout reference toanyparticularproject.Projectemployeesarenotentitled to terminationpay if theyare terminatedasaresultof thecompletionof theprojectoranyphase thereof inwhich theyareemployed, regardlessof thenumberofprojects inwhich theyhavebeenemployedbyaparticularconstructioncompany. Moreover, thecompany isnot required toobtainaclearance from theSecretaryofLabor inconnectionwithsuchtermination.WhatisrequiredofthecompanyisareporttothenearestPublicEmploymentOfficeforstatisticalpurposes.

IfaconstructionprojectoranyphasethereofhasadurationofmorethanoneyearandaProjectemployeeisallowedtobeemployedthereinforatleastoneyear,suchemployeemaynotbeterminateduntilthecompletionoftheprojectorofanyphasethereofinwhichheisemployedwithapreviouswrittenclearancefromtheSecretaryofLabor.IfsuchanemployeeisterminatedwithoutaclearancefromtheSecretaryofLabor,heshallbeentitledtoreinstatementwithbackwages.

Theemployeesofaparticularprojectarenotterminatedatthesametime.Somephasesoftheprojectarecompletedaheadofothers.Forthisreason,thecompletionofaphaseoftheProjectisthecompletionoftheprojectforanemployeeemployedinsuchphase.Inotherwords,employeesterminateduponthecompletionoftheirphaseoftheprojectarenotentitledtoseparationpayandexemptfromtheclearancerequirement.Ontheotherhand,thoseemployedinaparticularphaseofaconstructionprojectarealsonotterminatedatthesametime.Normally,lessandlessemployeesarerequiredasthephasedrawsclosertocompletion. Project employees terminatedbecause their servicesareno longerneeded in their particular phaseof theproject arenot entitled to separationpayandareexempt from the clearancerequirement,providedtheyarenotreplaced.Iftheyarereplaced,theyshallbeentitledtoreinstatementwithbackwages.

Members of a work pool from which a construction company draws its project employees, if considered employees of the construction company while in the work pool, are nonprojectemployeesor employees for an indefiniteperiod. If they are employed in a particular project, the completion of the project or of any phase thereofwill notmean severance of employeremployeerelationship.

However, if theworkers in thework pool are free to leave anytime and offer their services to other employers then they are project employees employed by a construction company in aparticularprojectorinaphasethereof.Generally,therearethree(3)typesofnonprojectemployees:first,probationaryemployeessecond,regularemployeesandthird,casualemployees.

Probationaryemployeesarethosewho,uponthecompletionoftheprobationaryperiod,areentitledtoregularization.Regularemployeesarethosewhohavecompletedtheprobationaryperiodorthoseappointedtofillupregularpositionsvacatedasaresultofdeath,retirement,resignation,orterminationoftheregularholderthereof.Ontheotherhand,casualemployeesarethoseemployedforashorttermdurationtoperformworknotrelatedtothemainlineofthebusinessoftheemployer.

xxxxxxxxx.PolicyInstructionsNo.20wassubsequentlysupersededbyDepartmentOrderNo.19(seriesof1993)datedApril1,1993oftheDepartmentofLaborandEmployment.[6]

Records,pp.3238.[7]

Belowisasampleofa"ContractEmployment"(fromRecords,p.36):

RAYCORAIRCONTROLSYSTEMS,INC.,Rms.30630720thCenturyBldg.,632ShawBlvd.

Mandaluyong,RizalNOTE:Pleasereturnwithyoursignature.

CONTRACTEMPLOYMENTSeptember01,1991

TO:FULGENCIOROBERTOYouareherebyhiredas,aContractEmployee/worker,subjecttothefollowingconditions:

1)YouremploymentcommencesonSeptember01,1991andshallbeeffectiveonlyforthedurationofthecontractatFarEastBank&TrustCo.aftercompletionofwhichonJanuary,1992itautomaticallyterminateswithoutnecessityoffurthernoticeprovided,however,thatit isexpresslyunderstoodthattheCompany,atitssolediscretion,mayterminatesaidemploymentatanytimeevenbeforecompletionofaforesaidcontractjob

2)Sinceyouremploymentiscontractualinnature,youmaybeterminatedatanytimewithoutnecessityofpriornoticeorterminalpay3)YouareobligedtoservetheCompanyduringthefulldurationofthecontractunlessyourservicesareearlierterminatedasprovidedinparagraph1hereof4)YourwagesshallbeattherateofP118.00perdayIftheabovetermsareacceptable,pleasesignyourconformitytherewith.

RAYCORAIRCONTROLSYSTEMS,INC.

BY:LUISF.ORTEGA

President&.GeneralManagerIcertifythatIhavereadandfullyunderstoodtheabovetermsandconditionsofemploymentandthatIagreeandabidebythem.

FULGENCIOROBERTOEmployee

Project:FarEastBank&TrustCo.(BalayanBranch)includingNationalBookstoreInc.

C.E.NO._____[8]

234SCRA678,683685,August2,1994.[9]

Ibid.,p.688.[10]

Records,p.65.ThisAnnex"A"isexactlythesamecontractformaspetitioner'sAnnexes"A"to"F".[11]

Thisfindingwasneverchallengedbytheprivaterespondents.[12]

Afterall,everyemployer is requiredby law (Section12 in relation toSection6ofRuleX,Book IIIof theOmnibusRules Implementing theLaborCode) topreserve itspayrollandemploymentrecordsforatleastthreeyearsfromthedateofthelastentryinsuchrecords.

[13]SeeGoldenDonuts,Inc.vs.NLRC,230SCRA153,February21,1994,andMapalovs.NLRC,233SCRA266,June17,1994.

[14]MGGMarineServices,Inc.,etal.,vs.NLRC,etal.,G.R.No.114313,July29,1996,atp.25.

[15]MGGMarineServices,Inc.vs.NLRC,supra,atpp.1517,citingKwikwayEngineeringWorksvs.NLRC,195SCRA526,March22,1991,andPepsiColaBottlingCo.vs.NLRC,210SCRA277,

June23,1992.[16]

Records,p.198.[17]

Themachinecopyoftheaddoesnotindicatethedateoredition/issuenumberofthenewspaper,butitcanbeinferredfromotherarticlesappearingonthesamepagethattheparticulareditioninwhichtheadappearedmusthavebeenpublishedbetweenMay27andJune12,1992,sometimeafterprivaterespondentshereinwereterminatedbypetitioner.