Gadia v. Sykes Asia, Inc., G.R. No. 209499, January 28, 2015

Gadia v. Sykes Asia, Inc., G.R. No. 209499, January 28, 2015 

Sykes Asia is a corporation engaged in Business Process Outsourcing (BPO) which provides support to its international clients from various sectors (e.g., technology, telecommunications, retail services) by carrying on some of their operations, governed by service contracts that it enters with them. On September 2, 2003,¹² Alltel Communications, Inc. (Alltel), a United States-based telecommunications firm, contracted Sykes Asia’s services to accommodate the needs and demands of Alltel clients for its postpaid and prepaid services (Alltel Project). Thus, on different dates, Sykes Asia hired petitioners as customer service representatives, team leaders, and trainers for the Alltel Project.

Sometime in 2009, Alltel informed Sykes that it is terminating its contract with Sykes. As a result, Sykes sent each of the petitioners end-of-life notices informing them of their dismissal from service due to the termination of the contract with Alltel. Aggrieved, they filed a case for illegal dismissal with the NLRC.

As a defense, Sykes alleged that the petitioners were merely project employees, which was clearly shown by their respective employment contracts.

Issue: Whether or not the petitioners are project employees.

YES.

Article 294 (now, Article 195[280]) of the Labor Code provides that an employee is deemed regular when he has been engaged to perform activities which are deemed usually necessary and desirable in the usual business or trade of the employer, except (i) 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 or (ii) where the work or services to be performed is seasonal in nature and the employment if for the duration of the season.

Accordingly, the the principal test for determining whether particular employees are properly characterised as project employees as distinguished from "regular employees," is whether or not the employees were assigned to carry out a "specific project or undertaking," the duration (and scope) of which were specified at the time they were engaged for that project. The project could either be (i) a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company; or (ii) a particular job or undertaking that is not within the regular business of the corporation. In order to safeguard the rights of workers against the arbitrary use of the word "project" to prevent employees from attaining a regular status, employers claiming that their workers are project-based employees should not only prove that the duration and scope of the employment was specified at the time they were engaged, but also, that there was indeed a project.

Thus, for an employee to be considered project-based, the employer must show compliance with two (2) requisites, namely that: (a) the employee was assigned to carry out a specific project or undertaking; and (b) the duration and scope of which were specified at the time they were engaged for such project.

In this case, the Court held that Sykes was able to prove both requisites.

As regards the first requisite, it held that Sykes adequately informed the petitioners of their employment status at the time of their engagement. As was shown by their respective employment contracts, they were hired for the Alltel Project and their positions were “project-based and as such is co-terminus to the project.”

As regards the second requisite, it held that “the duration of the undertaking begins and ends at determined or determinable times” which means capable of being determined or fixed. As such, indicating in the contract that their employment is “co-termius with the project” is sufficient compliance with this requisite.