REPUBLIC OF THE PHILIPPINES

NATIONAL LABOR RELATIONS COMMISSION

REGIONAL ARBITRATION BRANCH NO. III
CITY OF SAN FERNANDO, PAMPANGA

Employee 1 and
Employee 2
Complainants,
NLRC CASE NO.
-versus- RAB III 11- 24899-16

ER Industries Philippines
INC.
Respondent.
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--x

POSITION PAPER

COMES NOW, respondent ER Industries Philippines

INC. (ER), represented by Ms. Er, its Assistant General
Manager through the undersigned counsel, and unto this
Honorable Office, most respectfully submits this Position
Paper with the following averments:

I
PREFATORY STATEMENTS

This case involves a complaint for alleged illegal

dismissal and alleged non-payment of Service Incentive
Leave, backwages, and Separation Pay.

1
 II
PARTIES

Complainant, Employee 1, is of legal age, Filipino, and a

resident of 089 Phase 2 San Vicente Bamban, Tarlac.

Complainant, Antonio Calicdan Jr., is of legal age,

Filipino and a resident of Sitio Monicayo Calumpang
Mabalacat, Pampanga.

Respondent ER is a domestic corporation duly

organized and existing under the laws of the Republic of the
Philippines, with principal place of business at Bldg. 19
Philexcel Business Park, 1961st Area M. Roxas Highway, Clark
Special Economic Zone, Pampanga, Philippines. It may be
served with summons and other legal processes at the office
of undersigned counsel.

III
STATEMENT OF FACTS

1. Complainants Employee 1 and Antonio Calicdan Jr. were

former employees of ER.

2. Complainant, Employee 1 had three (3) project employments

with ER that are co-terminus with the completion of the
undertaking that he was hired. Such projects are the
following:

Project/Undertak Effectivity Date Date of

ing Completion
Proj!Project II March 28, 2016 September 13,
2016
Proj!Project I July 1, 2015 March 17, 2016

2
 Proj! Project December 15, June 30, 2015
2014

He was hired as a welder for the above-mentioned

three (3) projects. Employee 1s project employment
contracts with ER for Proj! Project, Proj!I Project, and
Proj!Project II are hereto attached as Exhibit 1, Exhibit
2, and Exhibit 3, respectively.

3. Complainant, Antonio Calicdan Jr., also had three (3) project

employments with ER that are co-terminus with the
completion of the undertaking that he was hired. Such
projects are the following:

Project/Undertak Effectivity Date Date of

ing Completion
Proj!Project II March 28, 2016 July 22, 2016
Proj!Project I July 1, 2015 March 23, 2016
Proj! Project February 2, 2015 June 30, 2015

He was engaged to work as a production helper for Proj!

Project and as a painter for Proj!Projects I and II. Antonio
Calicdans project employment contracts with ER for Proj!
Project, Proj!I Project, and Proj!Project II are hereto
attached as Exhibit 4, Exhibit 5, and Exhibit 6,
respectively.

4. Each project employment contract entered into between ER

and the complainants herein, contained specifically the
following provision under its paragraph 5:

As Project Employee, your employment is co-

terminus with the duration of the projectxxx. Upon
its completion, or even before, your employment will be

3
 terminated without any termination/separation pay xxx
.
(emphasis supplied)

5. Contracts entered into by ER for the Proj! Project, Proj!I

Project and Proj!II Project that it executed with its respective
clients are hereto attached as Exhibits 7, 8, 9,
accordingly.

6. Employee 1 and Antonio Calicdan Jr. were duly paid their

Service Incentive Leave (SIL) benefit.

The Acknowledgement Receipt dated October 12, 2016

evidencing acceptance by Antonio Calicdan of Philippine
Peso: Four Thousand Forty One and 63/100 cents (Php
4,041.63), representing his SIL is hereto attached as
Exhibit 10; while the Acknowledgement Receipt dated
October 10, 2016, showing payment to Employee 1 of his
SIL amounting to Philippine Peso: Three Thousand Nine
Hundred Fifty Six and 47/100 cents is hereto attached as
Exhibit 11.

7. Complainant Employee 1 was duly notified of the termination

of his project employment contracts with ER involving Proj!
Project I and Proj!Project II thru letters dated March 17, 2016
and September 13, 2016, respectively; attached hereto as
Exhibits 12 and 13, accordingly.

8. Establishment Termination Report were properly submitted

to the Department of Labor and Employment (DOLE) for the
termination of the employment contracts of Employee 1 and
Antonio Calicdan Jr. for Proj! Project, Proj!Project 1 and Proj!
Project II; hereto attached as Exhibit 14, 15, 16,
respectively.

9. Quitclaims by Employee 1 and Antonio Calicdan Jr. were also

executed; hereto attached as Exhibits 17 to 20.

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10. Complainants were duly paid their legal and other
benefits pursuant to their project based contract, copies of
pay slips of Employee 1 is hereto attached as Exhibit 21;
and that of Antonio Alicdan Jr. as Exhibit 22.

IV.
ISSUES

1. Whether or not the Complainants are Project

Employees;

2. Whether or not the Complainants were illegally

dismissed;

3. Whether or not the complainants are entitled to

the separation pay, service incentive leave,
backwages and other reliefs prayed for.

V.
DISCUSSIONS
AND
ARGUMENTS

1. Complai
nants
are
Project
Employe
es

5
 It cannot be gainsaid that the Complainants herein were
project employees whose employment is co-terminus with
the duration of the undertaking. Their contracts of
employment clearly stipulate that their engagement by the
company is only for the period of completion of the project.

The Supreme Court, in cases too numerous to cite,

upheld the validity and propriety of contracts that engages
employee on a project-based employment, pursuant to the
freedom of the parties to establish such stipulations, clauses,
terms and conditions as they may deem
convenient, provided they are not contrary to law.
1

A project employee is one whose 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.2

The case of Alcatel Philippines, Inc., et al. vs. R.R. Relos

is illustrative.3 The principal test for determining whether a
particular employee is a project employee or a regular
employee is whether the project employee was assigned to
carry out a specific project or undertaking, the duration and
scope of which were specified at the time the employee is
engaged for the project.

1Art. 1306. The contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs, public order, or public policy. (New
Civil Code)

2 Sandoval Shipping, Inc. v NLRC, 136 SCRA 674

3 GR. No. 164315, July 3, 2009.

6
 In the realm of business and industry, the Court notes
that the project could refer to one or the other of at least
two distinguishable types of activities. 4

Firstly, a project could refer to 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.5 Such job or undertaking begins and ends at
determined or determinable time. The typical example of
this first type of project is a particular construction job or
project of a construction company. A construction company
ordinarily carries out two or more discrete identifiable
construction projects; e.g., a twenty-five-story hotel in
Makati; a residential condominium building in Baguio City;
and a domestic air terminal in Iloilo City. Employees who are
hired for the carrying out of one of these separate projects,
the scope and duration of which has been determined and
made known to the employees at the time of the
employment are properly treated as project-employees,
and their services may be terminated at the completion of
the project.

Secondly, the term project could also refer to a

particular job or undertaking that is not within the regular
business of the corporation. Such a job or undertaking must
also be identifiably separate and distinct from the ordinary or
regular business operations of the employer. The job or
undertaking also begins and ends at determined or
determinable times.

Complainants project employment falls under the

second category. The project is within the regular course and
business of ER.
4 Id.

5 ALU-TUCP, et al. vs. NLRC and National Steel Corp., GR. No. 099092, August
2, 1994.

7
 Whichever type of project employment is found in a
particular case, a common basic requisite is that the
designation of named employees as project employees
and their assignment to a specific project are affected and
implemented in good faith.

Verily, for an employee to be considered project-based, the

employer must show compliance with two (2) requisites,
namely that: (a) the employee was assigned to carry out a
specific project or undertaking; and (b) the duration and
scope of which were specified at the time they were
engaged for such project.

ER adequately informed complainants of their

employment status at the time of their engagement, as
evidenced by the latters employment contracts which
similarly provide that they were hired in connection with
their respective projects, and that their positions were
"project-based and as such is co-terminus to the project."

As regards the second requisite, the law and

jurisprudence dictate that the duration of the undertaking
begins and ends at determined or determinable times while
clarifying that the phrase determinable times simply means
capable of being determined or fixed.6

ER expressly indicated in complainants employment

contracts that their positions were "co-terminus with the
project." This caveat sufficiently apprised complainants that
their security of tenure with ER would only last as long as the
project was subsisting. In other words, when the project was
terminated, complainants no longer had any project to work
on, and hence, ER may validly terminate them from
employment.

6Gadia, et al. vs. Sykes Asia, Inc. GR No. 209499 January 28, 2015.

8
 In the present case, the contract was knowingly and
voluntarily stipulated. There is nothing under the
circumstances that could remotely suggest that respondent
ER subjected the Complainants to any force, duress improper
pressure or any circumstance that vitiate consent.

On the contrary, as will be demonstrated, the parties

dealt with each other on more or less equal terms. The
project employment was freely and voluntarily agreed upon.

Preliminarily there exists a presumption that private

transactions are fair and regular. 7 By the presumption, ER is
relieved for the time being from introducing evidence in
support of the averment, because the presumption stands in
the place of evidence unless rebutted.8

If the Employment Contracts between the Complainants

on the one hand and ER on the other are presumptively
fair and regular, by inference they must have been
entered into knowingly and voluntarily without any
force, duress or improper pressure. No less than clear and
convincing evidence is required in order to rebut this
presumption.9 And, unless affirmative evidence to rebut the
presumption is adduced it becomes conclusive. 10

It may be well to quote the observations of the

Supreme Court in a celebrated case:

All men are presumed to be sane and normal and

subject to be moved by substantially the same motives.

7 Sec. 3 (p) Rule 131, Rules of Court

8Lee v. Court of Appeals, G.R. NO. 117913, February 1, 2002

9Rosaroso v. Soria, G.R. No. 194846 June 19, 2013

10 People v. De Guzman G.R. No. 106025February 9, 1994

9
When of age and sane, they must take care of
themselves. In their relations with others in the business of
life, wits, sense, intelligence, training, ability and judgment
meet and clash and contest, sometimes with gain and
advantage to all, sometimes to a few only, with loss and
injury to others. In these contests, men must depend upon
themselves upon their own abilities, talents, training,
senses, acumen, judgment.11

The Complainants herein may not complain of the

Employment Contracts they entered into, as the law
furnishes no greater protection to them to the disadvantage
of the company.

Clearly, the Employment Contracts of the Complainants

with ER were freely and voluntarily entered into. ER did not
exert moral dominance over the complainants. The
engagement is mutually beneficial to both parties. The
project-based employment contract between CORPORATION
and the Complainant is not contrary to law, morals, good
customs, public order, or public policy. The period of
employment serves legitimate purpose and is not intended
to evade the law on security of tenure.

ERs business and its ability to provide work for its

employees necessarily depend upon the availability of work
assigned by or obtained from clients. Each client catered by
the company involves a project that necessarily terminates
upon its completion.

11 Vales v. Villa, G.R. No. 10028, December 16, 1916

10
 2. The
Complai
nants
Employ
ment
Contract
s
EXPIRED
: They
were
NOT
Illegally
Dismisse
d

Having established that the Complainants are Project

Employees whose employment terminates upon the
completion of the project, the allegation of illegal dismissal
must be dismissed as a matter of course.

Since their work depends on availability of such projects

or contracts, necessarily the duration of the employment of
its workforce is not permanent but co-terminus with the
projects to which they are assigned and from whose payrolls
they are paid. It would be extremely burdensome for their
employer, who like them, depends on the availability of
project, to compel them to continuously hire workers even
after the completion of the project for which they were hired.

The completion of their work or project automatically

terminates their employment, in which case, the employer
is, under the law, only obliged to render a report on the
termination of the employment.

11
 The project-employment by ER was undertaken in good
faith and is not meant to circumvent the rights of its workers.
ER has no control over the decisions and resources of project
proponents or owners. There is no company that does not
wish it has such control but the reality is that work depended
on decisions and orders of clients over which the company
has no say.

The institution of this complaint by the complainants was

done in bad faith. They very well knew that their
employments are project-based and have ended accordingly.

Their employment with ER terminated automatically

upon the completion of the projects in their employment
Contracts. There is not even a need to issue a notice to
them.12 To be sure ER sent Termination Letters to Employee
1, dated March 17, 2016 (Exhibit 12) and September 13,
2016 (Exhibit 13), to inform him of the termination of his
engagement by ER for PROJ!PROJECT I and II, respectively.

Quitclaims dated March 23, 2016 (Exhibit 17) and

September 30, 2016 (Exhibit 18) for valuable consideration
received were executed by complainant Employee 1.
Similarly, complainant Antonio Calicdan Jr., executed
Quitclaims dated March 23, 2016 (Exhibit 19) and July 22,
2016 (Exhibit 20).

Complainants knew from the beginning that the

employment offered to them was project-based. They were

12Labayog v. M.Y. San Biscuit, G.R. No. 148102, July 11, 2006

12
free to accept or to refuse the offer. When they expressed
their acceptance, they bound themselves to the contract. 13

ER was even able to obtain clearance from the

Department of Labor and Employment (DOLE) for the
termination of the three (3) projects where the complainants
services were engaged for. The report made to the DOLE
negates the badge of fraud and bad faith on the part of ER.
ER treated its employee with fairness.

Clearly, their separation with ER was due to expiration

of their contract; it is not, therefore, ILLEGAL DISMISSAL. As
the Supreme Court decreed in Labayog v. M.Y. San, there
could have been no illegal dismissal when their services
were terminated on expiration of their contracts.

3. Non-
entitlem
ent of
Complai
nants to
Separati
on Pay

By the nature of their work, project-employees are not

entitled to separation pay. 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.

13Labayog v. M.Y. San Biscuit, G.R. No. 148102, July 11, 2006

13
 The complainants claim of Service Incentive Leave
monetized benefit is made in bad faith because they were
already given their respective monetized SIL.

VI.
PRAYER

WHEREFORE, in view of the foregoing, it is respectfully

prayed unto this Honorable Office that the complaint of
illegal dismissal, non-payment of separation pay, service
incentive leave benefit and other money claims be dismissed
for lack of merit.

Other reliefs that are just and equitable under the

premises are likewise prayed for.

_________, Pampanga for City of San Fernando,

Pampanga January __, 2017.

ABOGADO

VERIFICATION

I, Er, of legal age, after first being duly sworn to in

accordance with law depose and say that:

That I am the Assistant General Manager of

respondent ER in the above entitled Complaint. That I

14
 have caused the preparation of the foregoing position
paper. The contents thereof have been read and
translated to me in the dialect known and understood
by me. The same are true and correct to the best of my
knowledge and belief and based on authentic
documents.

In WITNESS WHEREOF, I have hereunto affixed my

signature this ___th day of ____________ 2017 in Floridablanca,
Pampanga.

ER
Affiant

SUBSCRIBED AND SWORN to before me this ___th day

of January 2017at Floridablanca, Pampanga , affiant
exhibiting to me his personal identification documents
written below their signature .

NOTARY PUBLIC
Doc. No. ___
Page No.___
Book No. __
Series of 2017

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