Case Digest (G.R. No. 211015)
Facts:
Cagayan Electric Power & Light Company, Inc. (CEPALCO) and CEPALCO Energy Services Corporation (CESCO) v. CEPALCO Employee's Labor Union‑Associated Labor Unions‑Trade Union Congress of the Philippines (TUCP), G.R. Nos. 211015 and 213835, June 20, 2016, the Supreme Court First Division, Perlas‑Bernabe, J., writing for the Court.The respondent union, CEPALCO Employee's Labor Union‑TUCP (respondent), is the certified bargaining representative of CEPALCO’s rank‑and‑file employees. CEPALCO is an electric distribution utility in Cagayan de Oro and nearby municipalities; CESCO is a business entity engaged in trading and services. On February 19, 2007, CEPALCO and CESCO entered into a Contract for Meter Reading Work (effective March 1, 2007) under which CESCO performed CEPALCO’s meter‑reading activities; in consequence several CEPALCO employees were displaced or reassigned and replaced by CESCO workers.
Respondent filed an Unfair Labor Practice (ULP) complaint on July 9, 2007 (NLRC Case No. RAB‑10‑07‑00408‑2007), alleging that the contracting out was designed to evade the Collective Bargaining Agreement and labor laws and would dissipate union membership — invoking Article 259(c) (formerly Art. 248(c)) of the Labor Code and DOLE rules on labor‑only contracting. Petitioners contended CESCO was an independent contractor, denied interference with union rights, and argued respondent lacked proper standing to seek declaration of CESCO employees as CEPALCO regulars.
The Labor Arbiter (LA) dismissed the complaint on August 20, 2008, finding CESCO an independent contractor with substantial evidence of its business and capitalization; the NLRC affirmed the dismissal on April 30, 2009, and denied reconsideration, prompting respondent’s certiorari petition to the Court of Appeals (CA) (CA‑G.R. SP No. 03169‑MIN).
While CA‑G.R. SP No. 03169‑MIN was pending, CEPALCO and CESCO executed a second contract on January 5, 2010 for warehousing works. Respondent filed another ULP complaint (NLRC Case No. RAB‑10‑12‑00602‑2009) alleging similar union‑busting and labor‑only contracting. The LA dismissed that complaint on July 29, 2010 (applying res judicata and finding lack of proof), the NLRC affirmed on February 21, 2011, and respondent filed certiorari before the CA (CA‑G.R. SP No. 04296‑MIN).
The CA, in CA‑G.R. SP No. 03169‑MIN (Decision dated September 14, 2012), reversed the NLRC in part: it held that CESCO was a labor‑only contractor for the meter‑reading contract (citing lack of control by CESCO, inadequate capitalization at the time, and the work’s direct relation to CEPALCO’s business), declared the CESCO workers to be CEPALCO’s regular employees, but nonetheless found no substantial evidence of ULP by CEPALCO. In CA‑G.R. SP No. 04296‑MIN (Decision dated November 11, 2013) the CA reached the same conclusion for the warehousing contract: CESCO was a labor‑only contractor and its workers are effectively CEPALCO regulars, but CEPALCO committed no ULP.
Petitioners filed petitions for review on certiorari in this Court (consolidated by resolution dated November 12, 2014), assailing the CA’s declarations that CESCO was a labor‑only...(Pro-only)
Issues:
- Is the CA’s declaration that CESCO is a labor‑only contractor rendered moot or academic by the tribunals’ final finding that CEPALCO committed no unfair labor practice?
- Does the respondent union have legal standing (real party‑in‑interest) to seek nullification of the CEPALCO‑CESCO contracts and a declaration that CESCO workers are CEPALCO regular employees?
- On the substantive merits, was CESCO a labor‑only contractor under Article 106 of the Labor Code and Sec...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)