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.
x------------------------------------------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/Undertaking Effectivity Date Date of Completion

Proj!Project II March 28, 2016 September 13, 2016
Proj!Project I July 1, 2015 March 17, 2016
Proj! Project December 15, 2014 June 30, 2015

He was hired as a welder for the above-mentioned three (3)

projects. Employee 1’s project employment contracts with ER for

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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/Undertaking Effectivity Date Date of 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 Calicdan’s
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 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.

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 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.”

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”.

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 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. Complainants are Project

Employees

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

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establish such stipulations, clauses, terms and conditions as they may
deem convenient,1provided they are not contrary to law.

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.

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.

1
Art. 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.
4
Id.
5
ALU-TUCP, et al. vs. NLRC and National Steel Corp., GR. No. 099092, August 2, 1994.

6
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.

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 latter’s
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

7
‘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.

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

6
Gadia, et al. vs. Sykes Asia, Inc. GR No. 209499 January 28, 2015.
7
Sec. 3 (p) Rule 131, Rules of Court
8
Lee v. Court of Appeals, G.R. NO. 117913, February 1, 2002

8
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. 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.

ER’s 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.

9
Rosaroso v. Soria, G.R. No. 194846 June 19, 2013
10
People v. De Guzman G.R. No. 106025 February 9, 1994
11
Vales v. Villa, G.R. No. 10028, December 16, 1916

9
2. The Complainants’
Employment Contracts
EXPIRED: They were NOT
Illegally Dismissed

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.

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
10
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 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

12
Labayog v. M.Y. San Biscuit, G.R. No. 148102, July 11, 2006
13
Labayog v. M.Y. San Biscuit, G.R. No. 148102, July 11, 2006

11
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-entitlement of
Complainants to Separation
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.

The complainant’s 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

12
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 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

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 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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