Rampant labor problems in construction industry

Managing construction companies requires not only good faith but also compliance with all labor laws. The owners and managers of construction companies should not only be experts in the technical aspects of engineering, architecture, building construction and other operational competencies, but also knowledge skills and proper attitude in leading and managing people, the arts and sciences of recruitment, compensation and benefits, training and labor relations and also in the intricate task of preparing contracts and other legal  documentation, as well as submission of reports to DOLE and other government agencies.

The construction industry, by the nature of its operations, is not expected to maintain regular employees because there is no assurance all the time that jobs are available, and that the presence of work is determined by the availability of projects. But because of the failure of the management of construction companies to observe the proper procedures, as well as the complete documentation of the project, the Supreme Court is compelled to declare regular status of workers' employment. Moreover, so many decisions of illegal dismissals indicate that the HR staffs of many construction companies do not comply with labor laws. Remittances of contributions to the SSS, PhilHealth and HDMF are not regularly done. There are also rampant violations of minimum wages and labor standard benefits, not to mention multiple issues on workers' health, safety and welfare.

In the case of Salvador Inocentes, et al versus R Syjuco Construction Inc, (GR 240549, August 27, 2020), the Supreme Court declared that a number of its workers  were regular employees and they were illegally dismissed, because management failed to bear the burden of proof that the workers were project employees. The company also did not submit the required DOLE report mandated under DOLE Policy Instruction number 20, as well as DOLE Department Order no 19, series of 1993, which outlined the guidelines for the employment of workers in the construction industry. This same company lost the same issue in another case in Dominic Inocentes versus R Syjuco Construction (GR 237020, July 29, 2019). Well, if you lose twice or more based on the same mistake, there must be something that you needed to change but did not. DM Consunji lost its case in DMCI vs Jamin (GR 192514, April 18, 2012) but won the same issue in DMCI vs Gobres (GR 169170, August 8, 2010).

Owners of construction companies should get competent and experienced HR managers and excellent lawyers to handle their cases. But even topnotch lawyers cannot win cases if there are no documents, and that management really did not follow the proper protocols. In D Dacles versus Millennium Erectors (GR 237020, July 29, 2019), management lost again for failure to bear the burden of proof that the nature of employment is that of project workers, not regular employees. Management did not report to DOLE, as required. But in Mario Bajaro versus Metro Stonerich (GR 227982, April 23, 2018), Management won because it did what was proper. The same is true in Garcia versus Sykes Asia (252 Phil 413, 2015),  as well as in William Uy Construction versus Trinidad (629 Phil 185, 2010) and in Malicdem versus Marulas (728 Phil 264, 2014).

The best victory gained by a construction company was by Metro Stonerich, cited above, where the Supreme Court declared: “In view of the distinct nature of the construction industry, the Court recognizes the right of an employer to hire project employees provided that the latter are sufficiently apprised of the duration and scope of such undertaking. The workers' tenure shall be coterminous with the project. Notably, the employees' performance of work that is usually necessary and desirable to the construction business as well as his repeated rehiring do not bestow upon him regular employment status.” Management, however, must never forget that the employer has the burden of proof to establish by competent evidence that indeed the employment engagement is for a project.

These are simple principles and procedures. It is high time that the construction industry should keep these in mind. Failing in which they lose their cases. And that means millions of litigation expenses and payment of backwages and separation pay.