G.R. No. 45163 - Javellana vs. La Paz Ice Plant and Cold Storage Co., Inc.

Petitioners – Randy Almeda, Edwin M. Audencial, Nolie D. Ramirez, Ernesto M. Calicagan, and Reynaldo M. Calicagan – were hired as glass cutters and a quality controller, respectively.
Respondent, Asahi Glass Philippines, Inc., is a domestic corporation engaged in glass manufacturing.
San Sebastian Allied Services, Inc. (SSASI), a labor-only contractor, was responsible for recruiting and assigning the petitioners to work for the respondent.

On March 5, 2002, respondent and SSASI entered into a service contract whereby SSASI undertook to provide the necessary manpower for respondent’s operations.
Based on the contract, SSASI employed petitioners who were assigned to work at respondent’s premises under the respondent’s work schedule and rules.
Petitioners’ functions as glass cutters and quality controllers were directly related to respondent’s main business of glass manufacturing.

Petitioners argued that, due to their long period of engagement (ranging from three to 11 years) and the fact that they worked at respondent’s premises under its directives, they had attained the status of regular employees of respondent.
They asserted that their dismissal without due process constituted illegal dismissal, entitling them to reinstatement and full backwages from December 2, 2002, up to actual reinstatement.
As supporting evidence, petitioners submitted a work schedule that demonstrated respondent’s direct control over their time and manner of work.

On December 1, 2002, respondent terminated its service contract with SSASI, prompting SSASI to dismiss the petitioners.
Petitioners initiated a complaint for illegal dismissal—including claims for moral and exemplary damages and attorney’s fees—before the Labor Arbiter.
In the Labor Arbiter’s Decision dated February 18, 2004, the complaint was dismissed for lack of merit; however, petitioners were awarded separation benefits.

The National Labor Relations Commission (NLRC), in its Decision dated June 29, 2005, reversed the Labor Arbiter’s ruling, finding that petitioners were employees of respondent and ordering their reinstatement along with backwages, holding respondent and SSASI jointly and severally liable.
Respondent sought reconsideration, but the NLRC Resolution dated November 24, 2005, denied the motion.
The Court of Appeals then intervened by reversing the NLRC decision in its Decision dated November 10, 2006, reinstating the earlier Labor Arbiter ruling that dismissed the petitioners’ illegal dismissal claim, though still ordering the payment of separation benefits.
Petitioners filed a Petition for Review on Certiorari assailing the Court of Appeals’ Decision and subsequent Resolution dated April 27, 2007.

The pivotal issues contested were: whether petitioners were truly employees of respondent and if so, whether their dismissal was legally justified or amounted to an illegal dismissal.
Respondent maintained that petitioners were merely workers of SSASI, a legitimately registered job contractor, and that any termination was due solely to the termination of the service contract.
Petitioners contended that the true nature of their assignment—being subject to the work rules, supervision, and control exercised by respondent—implied an employer-employee relationship with respondent, making their dismissal illegal without due process.

Whether petitioners, who were hired by SSASI but worked exclusively at respondent’s premises under respondent’s control, should be considered as employees of respondent rather than as mere contractual or agency workers.

Whether SSASI functioned as a legitimate job contractor with independent capital and investment, or engaged in labor-only contracting, which is prohibited under the law.
Whether the Certificate of Registration secured by SSASI with the Department of Labor and Employment (DOLE) can retroactively convert its status into a legitimate job contractor.

If petitioners are deemed regular employees of respondent, whether their dismissal—executed through termination of the service contract without prior notice and hearing—complied with the due process requirements.
Whether the reason cited (the termination of the service contract) amounts to a just or authorized cause for dismissal in light of statutory requirements for terminating regular employees.