De Ocampo, JR vs. NLRC

81
Luis De Ocampo, Jr., Jose Rodrigo, Eugenio Esquejo, Victorino Tabernero, Rizalo
Daliva, Francisco Acosta And 87 Others Listed In Annex 'A' Hereof
versus
National Labor Relations Commission And Makati Development Corporation
G.R. No. 81077, JUNE 6, 1990
FACTS:
Luis de Ocampo and other workers (petitioners) were hired by Makati

Development Corporation (MDC) with fixed terms of employment for a project at the
New Alabang Village. Sometime in 1980, the petitioners joined the strike initiated by
PTGWA union of which the petitioners where members. Later, MDC filed applications
for clearance to terminate the employment of 90 striking workers; that of said workers, 74
were project employees under contract with the MDC with fixed terms of employment
including the petitioners. MDC stated that the terminations of the employees were
justified since their contracts had expired. The petitioners argued that although the
contracts of the project workers had indeed expired, the project itself was still on-going
and so continued to require the workers' services for its completion.
ISSUE:
Whether or not de Ocampo and others are project employees and whether they can
be validly terminated on the ground of expiration of contracts regardless of non-
completion of project or any phase thereof.
RULING:
LABOR ARBITER:
The LA denied the applications for clearance filed by the MDC and directing it to
reinstate the workers with two months back wages each.
NLRC:
The LA’s decision was modified by the NLRC, the dispositive portion of which
reads as follows:
WHEREFORE, the Decision appealed from is hereby MODIFIED as hereinabove

indicated. Consequently, the application for clearance to dismiss the union officers is
granted; the employment status of the individual complainants who were project
employees is also considered severed, not on account of illegality of the strike but due to
the expiration of their employment contracts; and the respondent is ordered to reinstate,
without back wages, the individual complainants who were regular employees except
those who were officers of the union among them or paid separation pay at their option,
equivalent to one month's pay or one-half month's pay for every year of service,
whichever is greater.
SUPREME COURT’S RULING:
The Supreme Court ruled that workers are not considered regular employees, their
services being needed only when there are projects to be undertaken. 'The rationale of this
82
rule is that if a project has already been completed, it would be unjust to require the
employer to maintain them in the payroll while they are doing absolutely nothing except
waiting until another project is begun, if at all. In effect, these stand-by workers would be
enjoying the status of privileged retainers, collecting payment for work not done, to be
disbursed by the employer from profits not earned. This is not fair by any standard and
can only lead to a coddling of labor at the expense of management.
The Court further explained:

We believe, however, that this rule is not applicable in the case at bar, and
for - good reason. The record shows that although the contracts of the project
workers had indeed expired, the project itself was still on-going and so continued
to require the workers' services for its completion. There is no showing that such
services were unsatisfactory to justify their termination. One can therefore only
wonder why, in view of these circumstances, the contract workers were not
retained to finish the project they had begun and were still working on. This had
been done in past projects. This arrangement had consistently been followed
before, which accounts for the long years of service many of the workers had with
the MDC.
It is obvious that the real reason for the termination of their services-
which, to repeat, were still needed-was the complaint the project workers had filed
and their participation in the strike against the private respondent. These were the
acts that rendered them persona non grata to the management. Their services
were discontinued by the MDC not because of the expiration of their contracts,
which had not prevented their retention or rehiring before as long as the project
they were working on had not yet been completed. The real purpose of the MDC
was to retaliate against the workers, to punish them for their defiance by replacing
them with more tractable employees.
Also noteworthy in this connection is Policy Instruction No. 20 of the

Department of Labor, providing that "project employees are not entitled to
separation pay if they are terminated as a result of the completion of the project or
any phase thereof in which they are employed, regardless of the projects in which
they had been employed by a particular construction company." Affirmatively put,
and interpreting it in the most liberal way to favor the working class, the rule
would entitle project employees to separation pay if the projects they are working
on have not yet been completed when their services are terminated. And this
should be true even if their contracts have expired, on the theory that such
contracts would have been renewed anyway because their services were still
needed.
Applying this rule, we hold that the project workers in the case at bar, who
were separated even before the completion of the project at the New Alabang
Village and not really for the reason that their contracts had expired, are entitled to
separation pay.
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Luis de Ocampo and other workers (petitioners) were hired by Makati

WHEREFORE, the Decision appealed from is hereby MODIFIED as hereinabove

SUPREME COURT’S RULING:

The Court further explained:

Also noteworthy in this connection is Policy Instruction No. 20 of the

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