G.R. No. 191064 - People vs. Araneta y Abella

Petitioner Marvin O. Daguinod was initially employed as counter crew/cashier at Jollibee Alphaland, a franchise located in Makati City.
His employment was facilitated through a Service Agreement between Generation One Resource Service and Multi-Purpose Cooperative (“Generation One”) and Southgate Foods, Inc. (“Southgate”), wherein Generation One was contracted to provide “specified non-core functions and operational activities.”
Daguinod also executed a Service Contract with Generation One, being described as a “service provider” and “member,” though the specific work responsibilities were left blank.
Membership in Generation One required a fee and the acquisition of 150 paid-up shares, thereby creating a contractual link between Daguinod and Generation One.
Prior to his membership, Daguinod had worked directly for Southgate for a limited period, establishing a complex employment background.

On April 10, 2011, Daguinod reported for duty at Jollibee Alphaland and was issued a cash fund of P5,000.00.
Shortly after beginning his work, a customer’s receipt went missing when a security guard, Jaime Rivero, noted a transaction inconsistency involving a longanisa breakfast meal.
Manager Jane Geling conducted an audit which revealed an excess of P106.00 in the cash register.
Daguinod was taken to a function room where Geling accused him of theft. Despite his explanation that the cash overage negated any theft, he was pressed to respond immediately to two Notices to Explain (NTE) covering the cash register overage and the unauthorized use of a manager’s swipe card.
Under duress—and after having been confined—Daguinod wrote explanations that later became the basis for further allegations.

Following the issuance of NTEs, Daguinod was detained at the Makati Police Station on charges of Qualified Theft and, after spending several days in jail, was compelled to write a confession letter in exchange for his release.
Although he initially resisted, the duration of his detention and the pressure exerted on him eventually led him to comply with the demand.
His sister, Maribeth D. Pacheco, later corroborated his version of events, including the coercive circumstances leading to the confession.

Generation One maintained that Daguinod was its employee, contending that the complaint for illegal dismissal was premature because their investigation was ongoing.
Southgate argued that Daguinod, as an employee of Generation One, was not directly employed by them, and dismissed the claim of coercion in obtaining the confession.
Both Generation One and Southgate asserted the legitimacy of the labor contracting arrangement, relying on contractual provisions and a Certificate of Registration issued by the DOLE.
Labor tribunals, including the Labor Arbiter and the National Labor Relations Commission (NLRC), had previously ruled that Generation One was a legitimate labor contractor and that Daguinod’s dismissal was either non-existent or the product of his misinterpretation, findings which were later upheld by the Court of Appeals.

Daguinod, disputing the labor tribunal findings and the CA decision, filed a petition for review under Rule 45, challenging both the status of Generation One as a legitimate labor contractor and the validity of his dismissal.
The CA had dismissed his petition for certiorari and an ensuing Motion for Reconsideration, prompting the present judicial review.

Whether Generation One qualifies as a legitimate labor contractor under the applicable legal framework, or is merely engaging in labor-only contracting.

Whether the termination of Daguinod’s employment was valid, particularly with respect to compliance with the substantive and procedural due process requirements.
Whether reliance on the contractual declarations and the ensuing investigative procedures was sufficient to negate the occurrence of dismissal.