G.R. No. 231579 - Martinez vs. Magnolia Poultry Processing Plant

Parties and Nature of the Case
Petitioners Ronald O. Martinez and twenty-seven others (employees) filed a complaint for illegal dismissal with monetary claims against respondent San Miguel Foods, Inc. (SMFI-MPPP) and Romac Services and Trading Co., Inc. (Romac), their contractor.
Martinez, et al. were hired by Romac as daily paid rank and file employees assigned primarily to the production department of SMFI-MPPP engaged in poultry processing. Their tasks included sanitation work but notably also tasks directly connected to poultry processing such as receiving, dressing, packaging, deboning, and inspection.
SMFI-MPPP contended that Romac was a legitimate labor contractor supplying only peripheral services such as janitorial and housekeeping and that the employees were Romac’s employees rather than theirs.
Romac described itself as a legitimate contracting company with substantial capital and business distinct from SMFI-MPPP. It maintained that it hired, paid, disciplined, and exercised control over its employees, including Martinez, et al.
Martinez, et al. ceased working in January 2010 when SMFI-MPPP ceased operations in preparation for outsourcing services. They claimed illegal dismissal and asserted entitlement to regular employee benefits and CBA (Collective Bargaining Agreement) benefits from SMFI-MPPP.

Procedural History
The Labor Arbiter ruled in favor of Martinez, et al., declaring Romac a labor-only contractor and SMFI-MPPP as the true employer, thus ordering reinstatement and payment of backwages.
The National Labor Relations Commission (NLRC) reversed the Labor Arbiter, ruling Romac a legitimate labor contractor and denying illegal dismissal claims against SMFI-MPPP.
The Court of Appeals (CA) reinstated the Labor Arbiter’s ruling, affirming Romac as labor-only contractor and SMFI-MPPP as the true employer, and ordering payment of monetary claims.
Both Martinez, et al. and SMFI-MPPP filed separate petitions for review on certiorari before the Supreme Court seeking relief.

Whether Romac Services and Trading Co., Inc. is a legitimate labor contractor or a labor-only contractor.
Whether Martinez, et al. are regular employees of SMFI-MPPP entitled to regular employee benefits and entitled to reinstatement for illegal dismissal.
Whether the Court should defer or review the factual findings of the lower labor tribunals and the Court of Appeals on the issue of labor-only contracting.