D.M. Consunji, Inc. v. Gobres
REITERATIONFacts
The Antecedents: Respondents Antonio Gobres, Magellan Dalisay, Godofredo Paragsa, Emilio Aleta, and Generoso Melo were employed as carpenters by petitioner D.M. Consunji, Inc. Their employment was project-based, and their termination for each project was reported to the Department of Labor and Employment (DOLE). Their last assignment was at the Quad 4-Project in Glorietta, Ayala, Makati, where they started on September 1, 1998. On October 14, 1998, they discovered their names on the Notice of Termination posted on the project bulletin board. Procedural History: Respondents filed a complaint for illegal dismissal and non-payment of benefits with the National Labor Relations Commission (NLRC). The Labor Arbiter dismissed the complaint, finding them to be project employees validly terminated upon completion of their phases of work and that petitioner complied with reporting requirements to the DOLE. The NLRC affirmed the Labor Arbiter's decision. The Court of Appeals (CA) modified the NLRC ruling, affirming the validity of the dismissal but ordering petitioner to pay each respondent ₱20,000.00 as nominal damages for non-compliance with statutory due process (lack of advance notice). The CA cited Agabon v. NLRC as basis. Petitioner's motion for reconsideration was denied. The Petition: Petitioner D.M. Consunji, Inc. filed a petition for review on certiorari with the Supreme Court, questioning the CA's award of nominal damages, arguing that no prior notice is required for termination due to project completion under existing rules and that Agabon v. NLRC is not applicable.
Issue(s)
Whether or not there is a basis for the Court of Appeals to order the petitioner to pay respondents nominal damages for alleged non-compliance with statutory due process. Whether or not prior notice of termination is required for project employees whose employment is terminated due to the completion of the contract or phase thereof.
Ruling
The petition is granted. The Decision of the Court of Appeals is affirmed in upholding the validity of the dismissal of respondents, but the award of nominal damages to respondents is deleted. The Resolution of the Court of Appeals denying the motion for reconsideration is set aside.
Ratio Decidendi
On the issue of whether or not there is a basis for the Court of Appeals to order the petitioner to pay respondents nominal damages for alleged non-compliance with statutory due process: The Court held that there is no basis for the award of nominal damages. The respondents were project employees, and their termination was due to the completion of the phases of work for which they were engaged. Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code explicitly states that if the termination is brought about by the completion of the contract or phase thereof, no prior notice is required. Therefore, petitioner did not violate any requirement of procedural due process by failing to give respondents advance notice of their termination. The case of Agabon v. NLRC, cited by the Court of Appeals, is not applicable here because it involved the dismissal of regular employees for abandonment of work, which is a just cause under Article 282 of the Labor Code, and required observance of procedural due process. In contrast, the respondents in this case were terminated due to project completion, not for any just or authorized cause attributable to them. On the issue of whether or not prior notice of termination is required for project employees whose employment is terminated due to the completion of the contract or phase thereof: The Court reiterated that no prior notice is required in such instances. Project employees are defined under Article 280 of the Labor Code as those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of engagement. Section 1 (c), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code clarifies that while dismissal for just or authorized cause prior to project completion requires due process or prior notice, termination brought about by the completion of the phase of the project or contract for which the employee was engaged does not. Furthermore, Section 2 (III), Rule XXIII, Book V of the same Omnibus Rules directly provides that "If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required." This is consistent with the ruling in Cioco, Jr. v. C.E. Construction Corporation, which held that completion of the work or project automatically terminates the employment, obliging the employer only to render a report to the DOLE.
Main Doctrine
Project employees terminated due to the completion of the contract or phase thereof are not entitled to nominal damages for lack of advance notice, as no prior notice is required in such cases under Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code.