G.R. No. 185251 - Locsin vs. Philippine Long Distance Telephone Co.

On November 1, 1990, PLDT and the Security and Safety Corporation of the Philippines (SSCP) entered into a Security Services Agreement.
Under the Agreement, SSCP was to provide armed security guards to PLDT for assignment to its various offices.
Petitioners, Raul G. Locsin and Eddie B. Tomaquin, were among the security guards posted at a PLDT office.

On August 30, 2001, PLDT issued a letter terminating the Agreement effective October 1, 2001.
Despite the termination, petitioners continued to secure the premises at the PLDT office.
Petitioners alleged that they were directed to remain at their post by representatives of PLDT.
In support of their claim, petitioners submitted copies of Locsin’s pay slips covering January to September 2002.

On September 30, 2002, petitioners’ services were terminated by PLDT.
Petitioners filed a complaint before the Labor Arbiter alleging illegal dismissal.
They also claimed monetary benefits including overtime pay, holiday pay, premium pay for holidays and rest days, service incentive leave pay, emergency cost of living allowance, and moral and exemplary damages.

The Labor Arbiter rendered a decision holding that petitioners were employees of PLDT, not of SSCP, and that due process was not observed in their termination.
The Labor Arbiter ordered PLDT to pay separation pay and back wages to petitioners.
The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s Decision.
PLDT sought reconsideration of the NLRC ruling, which was denied, prompting the filing of a petition for certiorari with the Court of Appeals (CA).

The CA reversed the favorable rulings of both the Labor Arbiter and the NLRC by setting aside the resolutions finding illegal dismissal.
In its decision, the CA applied the four-fold test to determine the employment relationship and concluded that petitioners were employees of SSCP, not of PLDT.
The CA emphasized the provision in the Agreement stating there was no employer-employee relationship between the security guards and PLDT, and it noted that the pay slips were issued by SSCP.

Following the CA’s decision, petitioners filed a Petition for Review on Certiorari under Rule 45 challenging the CA’s ruling, specifically arguing the existence of an employer-employee relationship with PLDT.

Whether petitioners’ continued services after the termination of the Agreement, from October 1, 2001, to September 30, 2002, established an employer-employee relationship between petitioners and PLDT.

Whether petitioners’ one-year extension of services without a renewed contract qualifies as contractual employment pursuant to Article 280 of the Labor Code.

Whether petitioners’ thirteen years of service, with an apparent renewal of the security contract for part of the term, should be viewed merely as seasonal or fixed-project employment rather than direct employment.

Whether petitioners, originally alleged contractual employees under the SSCP agreement, became regular employees of PLDT during the period when no formal contract existed.

Whether the CA committed grave abuse of discretion in annulling the decisions of the Labor Arbiter and the NLRC which declared petitioners’ dismissal as illegal.