G.R. No. 169170. August 9, 2010.

* to the completion of the phases of work for which respondents’ services were
D.M. CONSUNJI, INC., petitioner, vs. ANTONIO GOBRES, MAGELLAN engaged. The above rule clearly states, “If the termination is brought about by
DALISAY, GODOFREDO PARAGSA, EMILIO ALETA and GENEROSO the completion of the contract or phase thereof, no prior notice is
MELO, respondents. required.” Cioco, Jr. v. C.E. Construction Corporation, 437 SCRA 648
(2004), explained that this is because completion of the work or project
Labor Law; Project Employees; Definition of a Project Employee.—A automatically terminates the employment, in which case, the employer is, under
project employee is defined under Article 280 of the Labor Code as one whose the law, only obliged to render a report to the DOLE on the termination of the
“employment has been fixed for a specific project or undertaking the completion employment.
or termination of which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal in nature 147
and the employment is for the duration of the season.” VOL. 627, AUGUST 9, 2010 147
_______________ D.M. Consunji, Inc. vs. Gobres
Same; Same; Same; Prior or advance notice of termination is not part of
* SECOND DIVISION. procedural due process if the termination is brought about by the completion of
the contract or phase thereof for which the employee was engaged.—Prior or
146 advance notice of termination is not part of procedural due process if the
146 SUPREME COURT REPORTS ANNOTATED termination is brought about by the completion of the contract or phase thereof
D.M. Consunji, Inc. vs. Gobres for which the employee was engaged. Petitioner, therefore, did not violate any
Same; Same; Termination of Employment; Court holds that Agabon v. requirement of procedural due process by failing to give respondents advance
NLRC, 442 SCRA 573 (2004), is not applicable to this case, because it involved notice of their termination; thus, there is no basis for the payment of nominal
the dismissal of regular employees for abandonment of work, which is a just damages.
cause for dismissal under Article 282 of the Labor Code.—The Court holds PETITION for review on certiorari of the decision and resolution of the Court of
that Agabon v. NLRC,  442 SCRA 573 (2004), is not applicable to this case, Appeals.
because it involved the dismissal of regular employees for abandonment of work,    The facts are stated in the opinion of the Court.
which is a just cause for dismissal under Article 282 of the Labor Code.   Marcos S. Pagaspas  for petitioner.
Although the dismissal was for a cause, the employer therein was required to   Ricardo M. Perez for respondents.
observe the standard of due process for termination of employment based on just
causes under Article 282 of the Labor Code, which procedural due process  
requirements  are enumerated in  Section 2, Rule 1, Book VI of the Omnibus PERALTA, J.:
Rules Implementing the Labor Code. Since the employer therein failed to  
comply with the twin requirements of notice and hearing,  the Court ordered the This is a petition for review on certiorari1 of the Decision of the Court of
employer to pay the employees involved nominal damages in the amount of Appeals in CA-G.R. SP No. 70708, dated March 9, 2005, and its Resolution,
P30,000.00 for failure to observe procedural  due process. dated August 2, 2005, denying petitioner’s motion for reconsideration.
Same; Same; Same; Dismissal based on just causes contemplate acts or The facts are as follows:
omission attributable to the employee.—Unlike in Agabon, respondents, in this Respondents Antonio Gobres, Magellan Dalisay, Godofredo Paragsa, Emilio
case, were not terminated for just cause under Article 282 of the Labor Code. Aleta and Generoso Melo worked as carpenters in the construction projects of
Dismissal based on just causes contemplate acts or omissions attributable to the petitioner D.M. Consunji, Inc., a construction company, on several occasions
employee. Instead, respondents were terminated due to the completion of the and/or at various times. Their termination from employment for each project was
phases of work for which their services were engaged. reported to the Department of Labor and Employment (DOLE), in accordance
Same; Same; Same; If the termination is brought about the completion of with Policy Instruction No. 20, which was later superseded by Department Order
the contract or phase thereof, no prior notice is required; Employer is, under the No. 19, series of 1993. Respondents’ last assignment was at Quad 4-Project in
law, only obliged to render report to the Department of Labor and Employment Glorietta, Ayala, Makati, where they started work-
(DOLE) on the termination of the employment.—The Labor Arbiter, the NLRC _______________
and the Court of Appeals all found that respondents were validly terminated due
 1 Under Rule 45 of the Rules of Court. of projects in which they have been employed by a particular construction
company. Moreover, the company is not required to obtain a clearance from the
148 Secretary of Labor in connection with such termination. What is required of the
148 SUPREME COURT REPORTS ANNOTATED company is a report to the nearest Public Employment Office for statistical
D.M. Consunji, Inc. vs. Gobres purposes.
ing on September 1, 1998. On October 14, 1998, respondents saw their names 3 Department Order No. 19, series of 1993
included in the Notice of Termination posted on the bulletin board at the project x x x x
premises. 2.2 Indicators of project employment. Either one or more of the following
Respondents filed a Complaint with the Arbitration Branch of the National circumstances, among others, may be considered as indicators that an employee
Labor Relations Commission (NLRC) against petitioner D.M. Consunji, Inc. and is a project employee.
David M. Consunji for illegal dismissal, and non-payment of 13th month pay, (a) The duration of the specific/identified undertaking for which the
five (5) days service incentive leave pay, damages and attorney’s fees. worker is engaged is reasonably determinable.
Petitioner D.M. Consunji, Inc. and David M. Consunji countered that (b) Such duration, as well as the specific work/service to be
respondents, being project employees, are covered by Policy Instruction No. 20, performed, is defined in an employment agreement and is made clear to
as superseded by Department Order No. 19, series of 1993 with respect to their the employee at the time of hiring.
separation or dismissal. Respondents were employed per project undertaken by (c) The work/service performed by the employee is in connection
petitioner company and within varying estimated periods indicated in their with the particular project/undertaking for which he is engaged.
respective project employment contracts. Citing the employment record of each (d) The employee, while not employed and awaiting engagement, is
respondent, petitioner and David M. Consuji averred that respondents’ services free to offer his services to any other employer.
were terminated when their phases of work for which their services were (e) The termination of his employment in the particular
engaged were completed or when the projects themselves were completed. project/undertaking is reported to the Department of Labor and
Respondents’ notices of termination were filed with the DOLE, in compliance Employment (DOLE) Regional Office having jurisdiction over the
with Policy Instruction No. 20,2 superseded by Depart- workplace within 30 days following the date of his separation from
_______________ work, using the prescribed form on employees’  terminations  dismissals
suspensions.
2 Policy No. 20: Stabilizing Employer-Employee Relations in the (f) An undertaking in the employment contract by the employer to
Construction Industry pay completion bonus to the project employee as practiced by most
In the interest of stabilizing employer-employee relations in the construction construction companies.
industry and taking into consideration its unique characteristics, the following x x x x
policy instructions are hereby issued for the guidance of all concerned: 6.1. Requirements of labor and social legislations. (a) The construction
Generally, there are two types of employees in the construction industry, company and the general contractor and/or subcontractor referred to in Sec. 2.5
namely: a) Project employees, and 2) Non-Project employees. shall be responsible for the workers in its employ on matters of compliance with
Project employees are those employed in connection with a particular the requirements of existing laws and regulations on hours of work, wages, wage
construction project. x x x related benefits, health, safety and social welfare benefits, including submission
Project employees are not entitled to termination pay if they are terminated as to
a result of the completion of the project or any phase thereof in which they are
150
employed, regardless of the number
150 SUPREME COURT REPORTS ANNOTATED
149 D.M. Consunji, Inc. vs. Gobres
VOL. 627, AUGUST 9, 2010 149 dent Generoso G. Melo, petitioner and David M. Consuji maintained the same
D.M. Consunji, Inc. vs. Gobres positions they had against the case of Melo’s co-complainants. 4 Petitioner
ment Order No. 19, series of 1993.3 With respect to respon- contended that since respondents were terminated by reason of the completion of
_______________ their respective phases of work in the construction project, their termination was
warranted and legal.5
 Moreover, petitioner claimed that respondents have been duly paid their private respondents are ordered to pay each of the petitioners the sum of
service incentive leave pay and 13th month pay through their respective bank P20,000.00 as nominal damages for non-compliance with the statutory due
accounts, as evidenced by bank remittances.6 process. Costs against petitioners.”11
Respondents replied that the Quad 4-Project at Glorietta, Ayala, Makati City
was estimated to take two years to finish, but they were dismissed within the  
two-year period. They had no prior notice of their termination. Hence, granting The Court of Appeals sustained the findings of the NLRC that respondents
that they were project employees, they were still illegally dismissed for non- are project employees. It held:
observance of procedural due process.7 “The Labor Arbiter and [the] NLRC correctly applied Article 280 of the
On October 4, 1999, the Labor Arbiter rendered a Decision 8 dismissing Labor Code when it ruled that petitioners’ employment, which is fixed for [a]
respondents’ complaint. The Labor Arbiter found that respondents were project specific project and the completion of which has been determined at the time that
employees, that they were dismissed from the last project they were assigned to their services were engaged, makes them project employees. As could be gleaned
when their respective phases of work were completed, and that petitioner D.M. from the last portion of Article 280 of the Labor Code, the nature of employment
Consunji, Inc. and David M. Consunji reported their termination of services to of petitioners, which is fixed for a specific project and the completion of which
the DOLE in accordance with the requirements of law. has been determined when they were hired, is excepted therefrom.
Respondents appealed the Labor Arbiter’s Decision to the NLRC. _______________
_______________
9  Id., at pp. 283-285.
the DOLE-Regional Office of Work Accident/Illness Report, Monthly 10 Id.,  at pp. 371-372.
Report on Employees’ Terminations/Dismissals/Suspensions and other reports 11 Id., at p. 37.
x x x. (Emphasis supplied.)
4 Decision of the Labor Arbiter, Rollo, p. 264. 152
5 Respondents’ Position Paper, CA Rollo, p. 27; id. 152 SUPREME COURT REPORTS ANNOTATED
6 Respondents’ Position Paper, CA Rollo, p. 40.
D.M. Consunji, Inc. vs. Gobres
7 Reply & Rejoinder to Respondents’ Position Paper, CA Rollo, p. 46.
This is the reason why under Policy Instruction No. 20 and Department
8 Rollo, pp. 263-265.
Order No. 19, series of 1993, employers of project employees are required to
151 report their termination to DOLE upon completion of the project for which they
VOL. 627, AUGUST 9, 2010 151 were engaged.”12
D.M. Consunji, Inc. vs. Gobres  
  The CA stated that although respondents were project employees, they were
In a Resolution9 dated July 31, 2001, the NLRC affirmed the decision of the entitled to know the reason for their dismissal and to be heard on whatever
Labor Arbiter, and dismissed the appeal for lack of merit.Respondents’ motion claims they might have. It held that respondents’ right to statutory due process
for reconsideration was denied by the NLRC for lack of merit in its Order 10 dated was violated for lack of advance notice of their termination, even if they were
February 21, 2002. validly terminated for having completed the phases of work for which they were
Respondents filed a petition for certiorari with the Court of Appeals, seeking hired. The appellate court stated that had respondents been given prior notice,
the annulment of the NLRC Resolution dated July 31, 2001 and Order dated they would not have reported for work on October 14, 1998. It cited Agabon v.
February 21, 2002.   NLRC,13 which  held that where the dismissal is for a just cause, the lack of
Respondents prayed that their dismissal be declared as illegal, and that they statutory due process should not nullify the dismissal, or render it illegal, or
be ordered reinstated to their former position with full backwages until actual ineffectual, but the employer should indemnify the employee for the violation of
reinstatement, and awarded moral, exemplary and nominal damages. his statutory rights by paying nominal damages. Hence, the Court of Appeals
On March 9, 2005, the Court of Appeals rendered a Decision, the dispositive ordered petitioner and David M. Consunji to pay respondents P20,000.00 each as
portion of which reads: nominal damages for lack of advance notice of their termination.
“WHEREFORE, the Decision and Resolution of the NLRC in finding Petitioner and David M. Consunji filed a partial motion for reconsideration
petitioners’ dismissal as valid are AFFIRMED with MODIFICATION that and prayed that the Decision of the Court of Appeals be partially reconsidered by
deleting the award of nominal damages to each respondent. It pointed out that 15 Id., at p. 18.
under Department Order No. 19, series of 1993, which is the construction 16 Emphasis supplied.
industry’s governing law, there is no provision requiring administrative
hearing/investigation before a project employee may be terminated on account of 154
completion of phase of work or the project itself. Petitioner also argued that prior 154 SUPREME COURT REPORTS ANNOTATED
notice of termination is not required in this case, and that Agabon is not D.M. Consunji, Inc. vs. Gobres
applicable here, because the termination in Agabon was for cause, while herein  
respondents were ter- In support of its argument, petitioner cited Cioco, Jr. v. C.E. Construction
_______________ Corporation,17 which held:
“x x x More importantly, Section 2 (III), Rule XXIII, Book V of
12 Id.,  at p. 33. the Omnibus Rules Implementing the Labor Code  provides that  no prior notice
13 485 Phil. 248; 442 SCRA 573 (2004). of termination is required if the termination is brought about by completion of
the contract or phase thereof for which the worker has been engaged. This is
153
because completion of the work or project automatically terminates the
VOL. 627, AUGUST 9, 2010 153 employment, in which case, the employer is, under the law, only obliged to
D.M. Consunji, Inc. vs. Gobres render a report to the DOLE on the termination of the employment.”18
minated due to the completion of the phases of work for which their services
were engaged.  
In a Resolution14 dated August 2, 2005, the Court of Appeals denied the The petition is meritorious.
partial motion for reconsideration. It held that the case of Agabon v. NLRC is the Respondents were found to be project employees by the Labor Arbiter, the
one controlling and in point. The appellate court stated that in Agabon, the Court NLRC and the Court of Appeals. Their unanimous finding that respondents are
ruled that even if the dismissal is legal, the employer should still indemnify the project employees is binding on the Court. It must also be pointed out that
employee for the violation of his statutory rights. It added that no distinction was respondents have not appealed from such finding by the Court of Appeals. It is
made in Agabon whether the employee is engaged in a construction project or only the petitioner that appealed from the decision of the Court of Appeals.
not. The main issue is whether or not respondents, as project employees, are
Petitioner D.M. Consunji, Inc. filed this petition raising this question of law: entitled to nominal damages for lack of advance notice of their dismissal.
WHETHER OR NOT THERE IS BASIS FOR THE COURT OF APPEALS A project employee is defined under Article 280 of the Labor Code as one
IN ORDERING HEREIN PETITIONER TO PAY RESPONDENTS EACH whose “employment has been fixed for a specific project or undertaking the
THE SUM OF P20,000.00 AS NOMINAL DAMAGES FOR “ALLEGED” completion or termination of which has been determined at the time of the
NON-COMPLIANCE WITH THE STATUTORY DUE PROCESS.15 engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.” 19
   
Petitioner contends that the  award of nominal damages in the amount of _______________
P20,000.00 to each respondent is unwarranted under Section 2 (III), Rule XXIII,
Book V of the Omnibus Rules Implementing the Labor Code, which states, “If 17 481 Phil. 270; 437 SCRA 648 (2004). (Emphasis and underscoring
the termination is brought about by the completion of the contract or phase supplied.)
thereof,  no prior notice is required.”16 18 Id.,  at pp. 277-278.
Petitioner also contends that Agabon v. NLRC is not applicable to this case. 19 See Saberola v. Suarez, G.R. No. 151227, July 14, 2008, 558 SCRA 135,
The termination therein was for just cause due to abandonment of work, while in 142.
this case, respondents were terminated due to the completion of the phases of
work. 155
_______________ VOL. 627, AUGUST 9, 2010 155
D.M. Consunji, Inc. vs. Gobres
14 Rollo, pp. 47-49.  
 In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found respondents were terminated due to the completion of the phases of work for
that respondents, as project employees, were validly terminated due to the which their services were engaged.
completion of the phases of work for which their services were engaged. As project employees, respondents’ termination is governed by Section 1 (c)
However, the Court of Appeals held that respondents were entitled to nominal and Section 2 (III), Rule XXIII (Termination of Employment), Book V of the
damages, because petitioner failed to give them advance notice of their Omnibus Rules Implementing the Labor Code.
termination. The appellate court cited the case of Agabon v. NLRC  as basis for Section 1 (c), Rule XXIII, Book V of the Omnibus Rules Implementing the
the award of nominal damages. Labor Code states:
The Court holds that Agabon v. NLRC is not applicable to this case, because “Section 1. Security of tenure.—(a) In cases of regular employment, the
it involved the dismissal of regular employees for abandonment of work, which employer shall not terminate the services of an employee except for just or
is a just cause for dismissal under Article 282 of the Labor Code. 20 Although the authorized causes as provided by law, and subject to the requirements of due
dismissal was for a cause, the employer therein was required to observe the process.
standard of due process for termination of employment based on just causes
under Article 282 of the Labor Code, which procedural due process requirements _______________
are enumerated in  Section 2, Rule 1, Book VI21 of the Omnibus Rules
_______________ (i)  A written notice served on the employee specifying the ground
or grounds for termination, and giving said employee reasonable
20 Art. 282. Termination by employer—An employer may terminate an opportunity within which to explain his side.
employment for any of the following causes: (ii)  A hearing or conference during which the employee concerned,
a. Serious misconduct or willful disobedience by the employee of with the assistance of counsel if he so desires is given opportunity to
the lawful orders of his employer or representative in connection with his respond to the charge, present his evidence or rebut the evidence
work; presented against him.
b. Gross and habitual neglect by the employee of his duties; (iii)  A written notice of termination served on the employee,
c. Fraud or willful breach by the employee of the trust reposed in indicating that upon due consideration of all the circumstance, grounds
him by his employer or duly authorized representative; have been established to justify his termination.
d. Commission of a crime or offense by the employee against the 22 Agabon v. National Labor Relations Commission, supra note 13, at p.
person of his employer or any immediate member of his family or his 284.
duly authorized representative; and 23 Id.
e. Other causes analogous to the foregoing. 157
21 Section 2. Security of Tenure.—x x x (d) In all cases of termination of
employment, the following standards of due process shall be substantially VOL. 627, AUGUST 9, 2010 157
observed: For termination of employment based on just causes as defined in D.M. Consunji, Inc. vs. Gobres
Article 282 of the Code: x x x x
(c) In cases of project employment or employment covered by legitimate
156 contracting or sub-contracting arrangements, no employee shall be
156 SUPREME COURT REPORTS ANNOTATED dismissed prior to the completion of the project or phase thereof for which the
D.M. Consunji, Inc. vs. Gobres employee was engaged, or prior to the expiration of the contract between the
Implementing the Labor Code.22 Since the employer therein failed to comply principal and contractor, unless the dismissal is for just or authorized cause
with the twin requirements of notice and hearing, the Court ordered the employer subject to the requirements of due process or prior notice, or is brought about by
to pay the employees involved nominal damages in the amount of P30,000.00 for the completion of the phase of the project or contract for which the employee
failure to observe procedural  due process. was engaged.”24
Unlike in Agabon, respondents, in this case, were not terminated for just  
cause under Article 282 of the Labor Code. Dismissal based on just causes Records show that respondents were dismissed after the expiration of their
contemplate acts or omissions attributable to the employee. 23 Instead, respective project employment contracts, and due to the completion of the phases
of work respondents were engaged for. Hence, the cited provision’s requirements
of due process or prior notice when an employee is  dismissed for just or In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found
authorized cause (under Articles 282 and 283 of the Labor Code)  prior  to the that respondents were validly terminated due to the completion of the phases of
completion of the project or phase thereof for which the employee was engaged work for which respondents’ services were engaged. The above rule clearly
do not apply to  this case. states, “If the termination is brought about by the completion of the contract
Further, Section 2 (III), Rule XXIII, Book V of the Omnibus Rules or phase thereof, no prior notice is required.” Cioco, Jr. v. C.E. Construction
Implementing the Labor Code provides: Corporation26 explained that this is because completion of the work or project
“Section 2. Standard of due process: requirements of notice.—In all cases automatically terminates the employment, in which case, the employer is, under
of termination of employment, the following standards of due process shall be the law, only obliged to render a report to the DOLE on the termination of the
substantially observed. employment.
1. For termination of employment based on just causes as defined in Article Hence, prior or advance notice of termination is not part of procedural due
282 of the Code: process if the termination is brought about by the completion of the contract or
(a) A written notice served on the employee specifying the ground phase thereof for which the
or grounds for termination, and giving to said employee reasonable _______________
opportunity within which to explain his side;
(b) A hearing or conference during which the employee concerned, 25 Emphasis and underscoring supplied.
with the assistance of counsel if the employee so desires, is given 26 Supra note 17.
opportunity to respond to the charge, present his evidence or rebut the
evidence presented against him; and 159
VOL. 627, AUGUST 9, 2010 159
_______________
D.M. Consunji, Inc. vs. Gobres
employee was engaged. Petitioner, therefore, did not violate any requirement of
24 Emphasis and underscoring supplied.
procedural due process by failing to give respondents advance notice of their
158 termination; thus, there is no basis for the payment of nominal damages.
158 SUPREME COURT REPORTS ANNOTATED In sum, absent the requirement of prior notice of termination when the
termination is brought about by the completion of the contract or phase thereof
D.M. Consunji, Inc. vs. Gobres for which the worker was hired, respondents are not entitled to nominal damages
(c) A written notice [of] termination served on the employee for lack of advance notice of their termination.
indicating that upon due consideration of all the circumstance, grounds WHEREFORE, the petition is GRANTED. The Decision of the Court of
have been established to justify his termination. Appeals in CA-G.R. SP No. 70708, dated March 9, 2005, insofar as it upholds
In case of termination, the foregoing notices shall be served on the the validity of the dismissal of respondents is AFFIRMED, but the award of
employee’s last known address. nominal damages to respondents is DELETED. The Resolution of the Court of
II. For termination of employment as based on authorized causes defined in Appeals, dated August 2, 2005, is SET ASIDE.
Article 283 of the Code, the requirements of due process shall be deemed No costs.
complied with upon service of a written notice to the employee and the SO ORDERED.
appropriate Regional Office of the Department at least thirty (30) days before the Carpio (Chairperson), Nachura, Abad and Mendoza, JJ.,  concur.
effectivity of the termination, specifying the ground or grounds for termination.
III. If the termination is brought about by the completion of the Petition granted, judgment affirmed, resolution set aside.
contract or phase thereof, no prior notice is required. If the termination is
brought about by the failure of an employee to meet the standards of the Note.—A project employee is assigned to a project which begins and ends at
employer in the case of probationary employment, it shall be sufficient that a determined or determinable times. (Goma vs. Pamplona Plantation
written notice is served the employee within a reasonable time from the effective Incorporated, 557 SCRA 124 [2008])
date of termination.”25  
——o0o——