REYNALDO CANO CHUA, doing business under the name & style PRIME MOVER

Carlos Maliwat Mason 1977 42/day

CONSTRUCTION DEVELOPMENT, petitioner,
vs.
COURT OF APPEALS, SOCIAL SECURITY COMMISSION, SOCIAL SECURITY SYSTEM, Private respondents alleged that petitioner dismissed all of them without justifiable
ANDRES PAGUIO, PABLO CANALE, RUEL PANGAN, AURELIO PAGUIO, ROLANDO grounds and without notice to them and to the then Ministry of Labor and
TRINIDAD, ROMEO TAPANG and CARLOS MALIWAT, respondents. Employment. They further alleged that petitioner did not report them to the SSS for
compulsory coverage in flagrant violation of the Social Security Act.7
DECISION
In his Answer,8 petitioner claimed that private respondents had no cause of action
TINGA, J.: against him, and assuming there was any, the same was barred by prescription and
laches. In addition, he claimed that private respondents were not regular
This is a petition for review of the Decision1 of the Court of Appeals in CA-G.R. CV employees, but project employees whose work had been fixed for a specific project
No. 38269 dated 06 March 1996, and its Resolution dated 30 July 1996 denying or undertaking the completion of which was determined at the time of their
petitioners Motion for Reconsideration,2 affirming the Order of the Social Security engagement. This being the case, he concluded that said employees were not
Commission (SSC) dated 1 February 19953 which held that private respondents entitled to coverage under the Social Security Act.9
were regular employees of the petitioner and ordered petitioner to pay the Social
Security System (SSS) for its unpaid contributions, as well as penalty for the delayed Meanwhile, the SSS filed a Petition in Intervention10 alleging that it has an interest in
remittance thereof. the petition filed by private respondents as it is charged with the implementation
and enforcement of the provisions of the Social Security Act. The SSS stated that it
On 20 August 1985, private respondents Andres Paguio, Pablo Canale, Ruel Pangan, is the mandatory obligation of every employer to report its employees to the SSS
Aurelio Paguio, Rolando Trinidad, Romeo Tapang and Carlos Maliwat (hereinafter for coverage and to remit the required contribution, including the penalty imposed
referred to as respondents) filed a Petition4 with the SSC for SSS coverage and for late premium remittances.
contributions against petitioner Reynaldo Chua, owner of Prime Mover
Construction Development, claiming that they were all regular employees of the On 01 February 1995, the SSC issued its Order11 which ruled in favor of private
petitioner in his construction business.5 respondents. The SSC, relying on NLRC Case No. RAB-III-8-2373-85,12 declared
private respondents to be petitioners regular employees. 13 It ordered petitioner to
Private respondents claimed that they were assigned by petitioner in his various pay the SSS the unpaid SS/EC and Medicare contributions plus penalty for the
construction projects continuously in the following capacity, since the period delayed remittance thereof, without prejudice to any other penalties which may
indicated, and with the corresponding basic salaries,6 to wit: have accrued.14 The SSC denied the Motion for Reconsideration15 of petitioner for
lack of merit.16

Andres Paguio Carpenter 1977 42/day Petitioner elevated the matter to the Court of Appeals via a Petition for
Review.17 He claimed that private respondents were project employees, whose
Pablo Canale Mason 1977 42/day periods of employment were terminated upon completion of the project. Thus, he
claimed, no employer-employee relation existed between the parties.18 There being
Ruel Pangan Mason 1979 39/day
no employer-employee relationship, private respondents are not entitled to
coverage under the Social Security Act.19 In addition, petitioner claimed that private
Aurelio Paguio Fine grading 1979 42/day
respondents length of service did not change their status from project to regular
employees.20
Romeo Tapang Fine grading 1979 42/day

Rolando Trinidad Carpenter 1983 (Jan.) 39/day Moreover, granting that private respondents were entitled to coverage under the
Act, petitioner claimed that the SSC erred in imposing penalties since his failure to
include private respondents under SSS coverage was neither willful nor deliberate,
but due to the honest belief that project employees are not regular The Court of Appeals rejected the claim of prescription, stating that the filing of
employees.21 Likewise, he claimed that the SSC erred in ordering payment of private respondents claims was well within the twenty (20)-year period provided
contributions and penalties even for long periods between projects when private by the Social Security Act.30 It found that the principle of laches could not also apply
respondents were not working.22 to the instant case since delay could not be attributed to private respondents,
having filed the case within the prescriptive period, and that there was no evidence
Petitioner also questioned the failure to apply the rules on prescription of actions that petitioner lacked knowledge that private respondents would assert their
and of laches, claiming that the case, being one for the injury to the rights of the rights.31
private respondents, should have been filed within four (4) years from the time
their cause of action accrued, or from the time they were hired as project Petitioner filed a Motion for Reconsideration,32 claiming that the Court of Appeals
employees. He added that private respondents "went into a long swoon, folded overlooked (1) the doctrine that length of service of a project employee is not the
their arms and closed their eyes"23 and filed their claim only in 1985, or six (6) years controlling test of employment tenure, and (2) petitioners failure to place private
or eight (8) years after they were taken in by petitioner.24 respondents under SSS coverage was in good faith. The motion was denied for lack
of merit.33
In resolving the petition, the Court of Appeals synthesized the issues in the petition,
to wit: (1) whether private respondents were regular employees of petitioner, and In the present Petition for Review, petitioner again insists that private respondents
whether their causes of action as such are barred by prescription or laches; (2) if so, were not regular, but project, employees and thus not subject to SSS coverage. In
whether petitioner is now liable to pay the SSS contributions and penalties during addition, petitioner claims that assuming private respondents were subject to SSS
the period of employment.25 coverage, their petition was barred by prescription and laches. Moreover,
petitioner invokes the defense of good faith, or his honest belief that project
The Court of Appeals, citing Article 280 of the Labor Code,26 declared that private employees are not regular employees under Article 280 of the Labor
respondents were all regular employees of the petitioner in relation to certain Code.lawphil.net
activities since they all worked either as masons, carpenters and fine graders in
petitioners various construction projects for at least one year, and that their work Petitioners arguments are mere reiterations of his arguments submitted before the
was necessary and desirable to petitioners business which involved the SSC and the Court of Appeals. More importantly, petitioner wants this Court to
construction of roads and bridges.27 It cited the case of Mehitabel Furniture review factual questions already passed upon by the SSC and the Court of Appeals
Company, Inc. v. NLRC,28 particularly the ruling therein which states: which are not cognizable by a petition for review under Rule 45. Well-entrenched is
the rule that the Supreme Courts jurisdiction in a petition for review is limited to
By petitioners own admission, the private respondents have been hired to reviewing or revising errors of law allegedly committed by the appellate court, the
work on certain special orders that as a matter of business policy it cannot findings of fact being generally conclusive on the Court and it is not for the Court to
decline. These projects are necessary or desirable in its usual business or weigh evidence all over again.34
trade, otherwise they would not have accepted . Significantly, such
special orders are not really seasonal but more or less regular, requiring Stripped of the lengthy, if not repetitive, disquisition of the private parties in the
the virtually continuous services of the "temporary workers." The NLRC case, and also of the public respondents, on the nature of private respondents
also correctly observed that "if we were to accept respondents theory, it employment, the controversy boils down to one issue: the entitlement of private
would have no regular workers because all of its orders would be special respondents to compulsory SSS coverage.
undertakings or projects." The petitioner could then hire all its workers on
a contract basis only and prevent them from attaining permanent status. The Social Security Act was enacted pursuant to the policy of the government "to
develop, establish gradually and perfect a social security system which shall be
Furthermore, the NLRC has determined that the private respondents have suitable to the needs of the laborers throughout the Philippines, and shall provide
worked for more than one year in the so-called "special projects" of the protection against the hazards of disability, sickness, old age and death."35 It
petitioner and so fall under the second condition specified in the above- provides for compulsory coverage of all employees not over sixty years of age and
quoted provision (Article 280, Labor Code).29 their employers.36
Well-settled is the rule that the mandatory coverage of Republic Act No. 1161, as has held that an employment ceases to be co-terminus with specific projects when
amended, is premised on the existence of an employer-employee relationship, the the employee is continuously rehired due to the demands of the employers
essential elements of which are: (a) selection and engagement of the employee; (b) business and re-engaged for many more projects without interruption.47 The Court
payment of wages; (c) the power of dismissal; and (d) the power of control with likewise takes note of the fact that, as cited by the SSC, even the National Labor
regard to the means and methods by which the work is to be accomplished, with Relations Commission in a labor case involving the same parties, found that private
the power of control being the most determinative factor.37 respondents were regular employees of the petitioner.48

There is no dispute that private respondents were employees of petitioner. Another cogent factor militates against the allegations of the petitioner. In the
Petitioner himself admitted that they worked in his construction proceedings before the SSC and the Court of Appeals, petitioner was unable to
projects,38 although the period of their employment was allegedly co-terminus with show that private respondents were appraised of the project nature of their
their phase of work.39 Even without such admission from petitioner, the existence employment, the specific projects themselves or any phase thereof undertaken by
of an employer-employee relationship between the parties can easily be petitioner and for which private respondents were hired. He failed to show any
determined by the application of the "control test," 40 the elements of which are document such as private respondents employment contracts and employment
enumerated above. It is clear that private respondents are employees of petitioner, records that would indicate the dates of hiring and termination in relation to the
the latter having control over the results of the work done, as well as the means particular construction project or phases in which they were employed. 49 Moreover,
and methods by which the same were accomplished. Suffice it to say that it is peculiar that petitioner did not show proof that he submitted reports of
regardless of the nature of their employment, whether it is regular or project, termination after the completion of his construction projects, considering that he
private respondents are subject of the compulsory coverage under the SSS Law, alleges that private respondents were hired and rehired for various projects or
their employment not falling under the exceptions provided by the law. 41 This rule phases of work therein.
is in accord with the Courts ruling in Luzon Stevedoring Corp. v. SSS42 to the effect
that all employees, regardless of tenure, would qualify for compulsory membership Anent the issue of prescription, this Court rules that private respondents right to
in the SSS, except those classes of employees contemplated in Section 8(j) of the file their claim had not yet prescribed at the time of the filing of their petition,
Social Security Act.43 considering that a mere eight (8) years had passed from the time delinquency was
discovered or the proper assessment was made. Republic Act No. 1161, as
This Court also finds no reason to deviate from the finding of the Court of Appeals amended, prescribes a period of twenty (20) years, from the time the delinquency
regarding the nature of employment of private respondents. Despite the insistence is known or assessment is made by the SSS, within which to file a claim for non-
of petitioner that they were project employees, the facts show that as masons, remittance against employers.50
carpenters and fine graders in petitioners various construction projects, they
performed work which was usually necessary and desirable to petitioners business Likewise, this Court is in full accord with the findings of the Court of Appeals that
which involves construction of roads and bridges. In Violeta v. NLRC,44 this Court private respondents are not guilty of laches. The principle of laches or "stale
ruled that to be exempted from the presumption of regularity of employment, the demands" ordains that the failure or neglect, for an unreasonable and unexplained
agreement between a project employee and his employer must strictly conform to length of time, to do that which by exercising due diligence could or should have
the requirements and conditions under Article 280 of the Labor Code. It is not been done earlier, or the negligence or omission to assert a right within a
enough that an employee is hired for a specific project or phase of work. There reasonable time, warrants a presumption that the party entitled to assert it either
must also be a determination of, or a clear agreement on, the completion or has abandoned it or declined to assert it. 51 In the instant case, this Court finds no
termination of the project at the time the employee was engaged if the objectives proof that private respondents had failed or neglected to assert their right,
of Article 280 are to be achieved.45 This second requirement was not met in this considering that they filed their claim within the period prescribed by
case. law.1avvphi1.net

Moreover, while it may be true that private respondents were initially hired for This Court finds no merit in petitioners protestations of good faith. In United
specific projects or undertakings, the repeated re-hiring and continuing need for Christian Missionary Society v. Social Security Commission,52 this Court ruled that
their services over a long span of timethe shortest being two years and the good faith or bad faith is irrelevant for purposes of assessment and collection of the
longest being eighthave undeniably made them regular employees.46 This Court penalty for delayed remittance of premiums, since the law makes no distinction
between an employer who professes good reasons for delaying the remittance of
premiums and another who deliberately disregards the legal duty imposed upon
him to make such remittance.53 For the same reasons, petitioner cannot now invoke
the defense of good faith.

WHEREFORE, the Petition is DENIED. The Decision and Resolution of the Court of
Appeals promulgated on 6 March 1996 and 30 July 1996 respectively,
are AFFIRMED. Costs against petitioner.

SO ORDERED.

Puno, Austria-Martinez, Callejo, Sr.*, and Chico-Nazario*, JJ., concur.