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Rada vs NLRC

January 9, 1992
Labor Standards

Hours of Work

OT Pay of a Project Based Employee

In 1977, Rada was contracted by Philnor Consultants and Planners, Inc as a driver. He was assigned to
a specific project in Manila.The contract he signed was for 2.3 years. His task was to drive employees
to the project from 7am to 4pm. He was allowed to bring home the company vehicle in order to
provide a timely transportation service to the other project workers. The project he was assigned to
was not completed as scheduled hence, since he has a satisfactory record, he was re-contracted for an
additional 10months. After 10 months the project was not yet completed. Several contracts thereafter
were made until the project was finished in1985.At the completion of the project, Rada was terminated
as his employment was co-terminous with the project. He later sued Philnor for non payment of
separation pay and overtime pay. He said he is entitled to be paid OT pay because he uses extra time
to get to the project site from his home and from the project site to his home everydayin total, he
spends an average of 3 hours OT everyday.
Whether or not Rada is entitled to separation pay and OT pay.
Separation payNO.
Overtime payYes.
Separation Pay
The SC ruled that Rada was a project employee whose work was coterminous with the project for
which he was hired. Project employees, as distinguished from regular or non-project employees, are
mentioned in Section 281 of the Labor Code as those '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.'Project employees are not entitled to termination 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 number of projects in which they have been employed by a particular
construction company. Moreover, the company is not required to obtain clearance from the Secretary
of Labor in connection with such termination.'
OT Pay
Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified points
along EDSA in going to the project site and drops them off at the same points on his way back from the
field office going home to Marikina, Metro Manila is not merely incidental to Rada's job as a driver. On
the contrary, said transportation arrangement had been adopted, not so much for the convenience of
the employees, but primarily for the benefit of Philnor. As embodied in Philnors memorandum, they
allowed their drivers to bring home their transport vehicles in order for them to provide a timely
transport service and to avoid delaynot really so that the drivers could enjoy the benefits of the
company vehicles nor for them to save on fair.