Labor Law

Hilario Rada vs National Labor Relations Commission

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G.R. No. 96078 – 205 SCRA 69 – Labor Law –┬áLabor Standards – Hours of Work – OT Pay of a Project Based Employee

Post-Employment – No Separation Pay for Project Employees

In 1977, Hilario Rada was contracted by Philnor Consultants and Planners, Inc. as a driver. He was assigned to a specific project in Manila. The contract he signed was for 2.3 years. His task was to drive employees to the project from 7am to 4pm. He was allowed to bring home the company vehicle in order to provide a timely transportation service to the other project workers. The project he was assigned to was not completed as scheduled hence, since he has a satisfactory record, he was re-contracted for an additional 10 months. After 10 months the project was not yet completed. Several contracts thereafter were made until the project was finished in 1985.

At the completion of the project, Rada was terminated as his employment was co-terminous with the project. He later sued Philnor for non payment of separation pay and overtime pay. He said he is entitled to be paid OT pay because he uses extra time to get to the project site from his home and from the project site to his home everyday – in total, he spends an average of 3 hours OT every day.

ISSUE: Whether or not Rada is entitled to separation pay and OT pay.

HELD: Separation pay – NO. Overtime pay – Yes.

Separation Pay

The SC ruled that Rada was a project employee whose work was coterminous with the project for which he was hired. Project employees, as distinguished from regular or non-project employees, are mentioned in Section 281 of the Labor Code as those ‘where the 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.

‘Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in connection with such termination.’

OT Pay

Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to Rada’s job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of Philnor. As embodied in Philnor’s memorandum, they allowed their drivers to bring home their transport vehicles in order for them to provide a timely transport service and to avoid delay – not really so that the drivers could enjoy the benefits of the company vehicles nor for them to save on fair.

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