G.R. No. 147566 - San Miguel Corporation vs. National Labor Relations Commission

San Miguel Corporation (SMC) is the petitioner, while Rafael Maliksi is the respondent.
Maliksi initiated a complaint alleging that he was illegally dismissed and seeking recognition as a regular employee.
The case traversed several stages: first at the Labor Arbiter, then the National Labor Relations Commission (NLRC), followed by affirmation of the NLRC decision by the Court of Appeals (CA), and finally review under Rule 45 before the Supreme Court.

Maliksi’s work history shows multiple periods of service with SMC-related operations through labor-only contractors:

Employed with Lipercon Services from April 1, 1981 to February 1982 as a budget head assigned to SMC-Beer Division.
Worked from July 1983 to April 1985 with Skillpower, Inc. as an accounting clerk assigned to SMC-Magnolia Division.
Rendered services from October 1988 to 1989, again with Skillpower, Inc. as an acting clerk assigned to SMC-Magnolia Finance.
From October 1989 to October 31, 1990, employed by the Philippine Software Services and Education Center (PHILSSEC) as an accounting clerk assigned to SMC’s Magnolia Finance.

Despite being hired through independent labor contractors, Maliksi performed activities integral to SMC’s business operations.
His service, though fragmented in contractual terms, accumulated to an aggregate period exceeding three years, which is central to his claim for regularization.

Maliksi claimed that his dismissal on October 31, 1990—as part of the completion of a computerization project handled by PHILSSEC—was illegal and retaliatory for seeking regularization.
He argued that, having been continuously placed in roles at SMC by various labor-only contractors (Lipercon, Skillpower, and PHILSSEC), he was de facto a regular employee.
SMC contended that the engagement under PHILSSEC was project-based, employed for a limited period, and that PHILSSEC exercised managerial prerogative regarding hiring, salary, and dismissal.

SMC maintained contracts with PHILSSEC, Lipercon, and Skillpower, allegedly as front operators to circumvent labor laws, notably Article 280 of the Labor Code.
PHILSSEC’s mandate included setting up the computerization system for SMC’s Magnolia Division, wherein Maliksi played a crucial administrative role (data gathering, manual data processing, and reconciliation of account balances).
SMC argued that it was interested only in the results of the project rather than the individual contractual engagements that placed Maliksi in its workforce.

The Labor Arbiter initially declared Maliksi a regular employee of PHILSSEC, thereby absolving SMC of direct liability.
The NLRC reversed this decision, finding that Maliksi was effectively a regular employee of SMC due to his continuous service through various labor-only contractors, and ordered his reinstatement with full benefits and backwages.
The CA affirmed the NLRC’s ruling, emphasizing that the cumulative nature of Maliksi’s service with SMC via the labor-only contractors established a regular employment relationship.
SMC, on review, raised several errors regarding the classification of Maliksi’s employment status, the application of the "all doubts in favor of labor" principle, and the exclusion of his role in the computerization project.

Whether Maliksi, having been employed through labor-only contractors (Lipercon, Skillpower, and PHILSSEC) over several non-continuous periods, should nonetheless be regarded as a regular employee of SMC.

Whether the use of labor-only contracting arrangements was an intentional stratagem by SMC to circumvent the provisions of labor law, specifically those ensuring that employees obtain regularization after a statutory period of service.

Whether the trial courts erred in resolving the employment dispute by applying the principle that "all doubts must be resolved in favor of labor," notwithstanding evidences of false statements and alleged bad faith on the part of Maliksi.

Whether Maliksi’s assignment under the computerization project—with duties that were primarily administrative and not requiring specialized computer expertise—should count as regular employment despite arguments that it was a project-based, temporary engagement.

Whether SMC’s argument that PHILSSEC acted as an independent contractor, thereby dissociating SMC from direct employer responsibilities, holds merit in light of the overall service rendered by Maliksi to SMC’s business operations.