Wednesday, February 22, 2012

Glory Philippines, Inc. vs. Vergara (2007)

Facts: Petitioner corporation manufactures money-counting machines for export exclusively for Glory Japan Ltd. (Glory Japan). Petitioner hired respondents as members of Parts Inspection Section (PIS) on July 6, 1998 but employment contracts indicated respondents as Production Operators for a period of one month and renewed on a monthly basis. On April 26, 1999, Glory Japan cancelled its orders such that contractual employees in the PIS were no longer needed. Petitioner extended respondents’ employment due to their pleas and continued to work until May 25, 1999 when the security guard informed them that their employment had been terminated. Respondents filed complaints for illegal dismissal. 

Issue: Whether or not respondents were regular employees. 

Held: YES. Contrary to petitioner’s claim that respondents were project employees whose employment was coterminous with the transaction with Glory Japan, the same was not indicated in the contracts. As correctly observed by the Court of Appeals, nothing therein suggested or even hinted that their employment was dependent on the continuous patronage of Glory Japan. The principal test for determining whether particular employees are properly characterized as “project employees,” as distinguished from “regular employees,” is whether or not the “project employees” were assigned to carry out a “specific project or undertaking,” the duration and scope of which were specified at the time the employees were engaged for that project. Further, the employment contracts did not indicate the duration and scope of the project or undertaking as required by law. It is not enough that an employee is hired for a specific project or phase of work to qualify as a project employee. There must also be a determination of, or a clear agreement on, the completion or termination of the project at the time the employee was engaged, which is absent in this case. 

Project employees are those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project or undertaking has been determined at the time of engagement of the employee.

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