PETITIONER Pacific Meals Co. Ltd. (Pamco) is a foreign company engaged in the importation of nickel ore mined in the Philippines. In line with its desire to purchase high quality nickel ore from its target area, Pamco negotiated to enter into an exploration agreement with Eramen Minerals Inc. (Eramen) for the development of a target area covered by the latter’s Mineral Production and Sharing Agreement.
In preparation for its joint venture business with Eramen, Pamco engaged the services of respondent Edgar Allan Tamayo, a licensed and registered geologist. Tamayo signed up for a two-month contract commencing in September 2010. The two-month engagement was extended for another two months or until Jan. 31, 2011. When Pamco entered into another exploration agreement with Eramen, Tamayo was designated as manager for the Eramen/Pamco exploration project. As such, he was in charge of preparing the project reports and updates and budget requests for approval of Eramen’s president.
In a letter dated Nov. 29, 2011, Tamayo was informed that his services as exploration manager was terminated effective Dec. 31, 2011 in view of the completion of the exploration aspect of the project. Consequently, Tamayo filed a complaint for illegal dismissal and money claims against Pamco and Eramen. In defense, Pamco asserts that Tamayo was a project employee because his employment contract with the company was pre-determined and had a specific duration, i.e., two months.
Does this defense find merit?
Ruling: No.
True, Tamayo’s first engage-ment was in fact covered by a duly executed service contract, specifying the project for which he was hired and its two-month duration. But this is not the contested engagement in this case. The controversy hinges on Tamayo’s subsequent employment or his re-hiring and assignment as exploration manager for the Eramen/Pamco exploration project. This engagement was not covered by any employment contract.
Be that as it may, the lack of an employment contract would not hinder the determination of the status of Tamayo’s employ-ment. For while the appropriate evidence showing that a person is a project employee pertains to the employment contract specifying the project and its duration; the existence of such contract is not always conclusive of the nature of one’s employ-ment.
In connection with Tamayo’s subsequent engagement for the Eramen/Pamco exploration project, he rendered services therefor from January 2011 until Dececember 2011 when he got terminated due to alleged project completion.
That the exploration project was allegedly already completed does not suffice to convince that indeed the project had reached its conclusion. For no proof was adduced to substantiate this allegation. It is quite unconvincing that the exploration project was alleged to have already been completed or was even nearing completion, only one year after its commencement, considering that the project was actually good for five years. Surely, a project good for five years could not have been accomplished for such short period of one year.
More, it cannot go unnoticed that the supposed “project completion” happened when Tamayo was about to complete his first year of employment with Pamco. It bears stress that it is a common practice for employers to set the duration of an employment contract to a period shorter than one year to prevent an employee from attaining regular employment status, conformably with Article 295 of the Labor Code. The termination of Tamayo’s employment, therefore, just a few weeks short of his one-year anniversary as an employee is highly suspect. It is not remotely possible that the termination was done to prevent Tamayo from gaining the status of a regular employee.
Based on Article 295 of the Labor Code, one is deemed a regular employee if one: a) had been engaged to perform tasks which are usually necessary or desirable in the usual business or trade of the employer, unless the employment is one for a specific project or undertaking or where the work is seasonal and for the duration of a season; or b) has rendered at least one year of service, whether such service is continuous or broken, with respect to the activity for which he is employed and his employment continues as long as such activity exists. (Pacific Metals Co. Ltd. vs. Edgar Allan Tamayo, et al., G.R. 226920, Dec. 5, 2019).