Title
Cagayan Electric Power and Light Co., Inc. vs. CEPALCO Employee's Labor Union-Associated Labor Unions
Case
G.R. No. 211015
Decision Date
Jun 20, 2016
CEPALCO contracted CESCO for meter reading and warehousing, displacing union members. Court ruled CESCO as labor-only contractor but found no ULP; union lacked standing for CESCO workers' relief.
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Case Digest (G.R. No. 211015)

Facts:

Background of Parties:

  • CEPALCO: A domestic corporation engaged in electric distribution in Cagayan de Oro and Misamis Oriental.
  • CESCO: A business entity engaged in trading and services, formerly known as CEPALCO Energy Services & Trading Corporation (CESTCO).
  • Respondent Union: CEPALCO Employee’s Labor Union-Associated Labor Unions-Trade Union Congress of the Philippines (TUCP), the certified bargaining representative of CEPALCO’s regular rank-and-file employees.

First Contract (Meter Reading Work):

  • On February 19, 2007, CEPALCO and CESCO entered into a Contract for Meter Reading Work effective March 1, 2007.
  • CESCO undertook to perform CEPALCO’s meter-reading activities, resulting in the displacement of several CEPALCO employees and union members.
  • The respondent union filed a complaint for Unfair Labor Practice (ULP) alleging that the contracting arrangement violated the Collective Bargaining Agreement (CBA) and labor laws, leading to the dissipation of union membership.

Second Contract (Warehousing Work):

  • On January 5, 2010, CEPALCO and CESCO entered into another Contract of Service for warehousing works.
  • Three union members from CEPALCO’s logistics department were replaced by CESCO workers, prompting another ULP complaint from the union.

Labor Tribunal Proceedings:

  • The Labor Arbiter (LA) dismissed both complaints, ruling that CESCO was an independent contractor with substantial capital and equipment, and there was no ULP.
  • The National Labor Relations Commission (NLRC) affirmed the LA’s decision.
  • The Court of Appeals (CA) partially granted the union’s petition, finding that CESCO was a labor-only contractor, but absolved CEPALCO of ULP.

Issue:

  1. Whether CESCO was engaged in labor-only contracting in relation to CEPALCO.
  2. Whether CEPALCO committed Unfair Labor Practice (ULP) by contracting out services to CESCO.
  3. Whether the CA erred in declaring CESCO’s workers as regular employees of CEPALCO, despite the absence of ULP.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)


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