Hanjin v Ibanez

HANJIN v IBANEZ

Labor: Compromise

FACTS: -

Hanjin Heavy Industries and & Construction Company terminated the services of Ibanez and four other employees (2002)

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Ibanez et al states that they have been employees of Hanjin and have worked on the projects of H anjin including the North Harbor project (1992-1994), Manila International Port (1994-1996) and Batangas Port (1996- 1998) and projects currently being completed including the La Mesa Dam project

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Hanjin claims that such employees cannot claim illegal dismissal for the ff reasons: o

They are project employees whose employment is co-terminus with the project (LR T project). 

They stated that this was expressly written in their contract but Hanjin produced such copies for the labor arbiter

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They have signed quitclaims which bars them from filing action or claiming other receivables due to them because they have already received it as per their quitclaim

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Labor arbiter ruled in favour of Ibanez et al, ruling that there is an illegal dismissal and that Hanjin is liable to pay backwages and damages, stating that they are regular employees and not project employees

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NLRC reversed Labor Arbiter’s decision. CA reversed NLRC decision stating that Hanjin is liable.

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On NLRC, Hanjin changed i ts argument stting that they did not need any further contract to state that their employees were project employees given that the nature of the work is construction.

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Hanjin also states that while there was no project-bas ed contract, they complied with all the requirements of law and DOLE for project-based employees.

ISSUE: WoN Ibanez et al are regular employees or project employees WoN the quitclaim they signed bar them from any legal remedies or collection of any other receivables from their previous employers RULING: -

ON EMPLOYMENT: The principal test for determining whether particular employees are properly characterized as "project employees" as distinguished from "regular employees" is whether or not the project employees were assigned to carry out a "specific project or undertaking," the undertaking," the duration and scope of which were specified at the time the employees were engaged for that project. In a number of cases, the Court has held that the length of service or the re-hiring of construction workers on a pr oject-to-project basis does not confer upon them regular employment status , since their re-hiring is only a natural c onsequence of the fact that experienced construction workers are preferred. o

Petitioners did not present other Termination Reports apart from that filed on 11 April 2002. The failure of an employer to f ile a Termination Report with the DOLE every time a project or a phase thereof is completed indicates that respondents were not project employees

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If respondents were actually project employees, petitioners should have filed as many Termination Reports as there were construction projects actually finished and for which respondents were employed.

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Basically, Hanjin failed to prove their contentions because: o

They were not able to submit the actual contract

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They were not able to establish that they were sending termination reports to DOLE everytime a Project is completed

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They were not able to submit other documents or evidences which states their compliance with project-based employment (project completion bonus etc). The payroll records they show simply state that they paid the p roject employees a “bonus” but bears no connection to the completion of the project.

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The sum of this points to the f act that Ibanez et al were not project employees.

ON QUITCLAIM: o

Finally, the Quitclaims which the respondents signed cannot bar them from demanding what is legally due them as regular employees. As a rule, quitclaims and waivers or releases are looked upon with disfavor and frowned upon as contrary to public policy. They are thus ineff ective to bar claims for the full measure of a worker's legal rights, particularly when the following conditions are applicable: 

1) where there is clear proof t hat the waiver was wangled from a n unsuspecting or gullible person, or

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(2) where the terms of settlement are unconscionable on their face.

To determine whether the Quitclaims signed by respondents are valid, one important factor that must be taken into account is the consideration accepted by respondents; the amount must constitute a reasonable settlement equivalent to the full measure of their legal rights. In this case, the Quitclaims signed by the respondents do not appear to have been made for valuable consideration.  Respondents, who are regular employees, are entitled to backwages and separation pay and, therefore, the Quitclaims which they signed cannot prevent them from seeking claims to which they are entitled.